PLANNING TO SELL YOUR BUSINESS?

Before deciding to sell your business, you should ask yourself these questions;

  • Am I ready to sell?
  • Have I considered options other than selling(such as becoming a silent partner or bringing in outside management?)
  • Will family members support my decision to sell?
  • Do I want freedom, away from the responsibility of running my business ? eg to pursue other business interests or spend time with the family?
  • Is the timing right? eg could the market and sale price be better if I waited? Is my professional development on track?
  • Will the sale benefit me financially?
  • Will the sale leave me free to earn my living, or will I be restrained from trading eg  a restraint of trade clause in the condition of sale?

If the answer is "yes" to the above then you are ready to start planning the sale.


WHY, WHAT, WHO and WHEN

Planning is essential for selling a business successfully. Planning involves making specific decisions about why you are selling,what will be sold,who will it be offered to,and when to offer it.


WHY ARE YOU SELLING?

Businesses are bought and sold every day,and there are many explanations for a sale  eg; Ive decided that its time to  move on to the next phase of life.

  • I want to do something different
  • Im planning to retire
  • Im going to spend more time with my family
  • I want to sell the business to someone younger
  • I want to sell it to someone who has the resources to make it even more profitable
  • I have health issues to deal with.

Your answer needs to convince a prospective buyer. Buyers will respond more favourably to genuine answers and consistent reasons


WHAT IS BEING SOLD?

You should be very specific about what is being sold. Selling a business differs from selling say shares in a company.

  • If you have run the business under a company structure, buyers will be mainly interested in your business assets and operations, not the company itself. And selling a company does not just mean selling the business. It also involves disposing of all its debts and liabilities, such as outstanding loans, overdrafts, taxation, trade creditors current orders and other issues like non compliance with statutory requirements or complaints by previous customers.
  • If plant, machinery and equipment are part of the sale clearly itemise the assets owned by the business that will form part of the sale. 
  • List identifying serial numbers.Obtain details of the costs of each item and the written down depreciated values from your accountant

Will the Property be part of the Sale?

  • If you are the owner of both the business and the property(often referred to as the "freehold") you need to decide if you will include the property in the sale.. If the property is not included,the selling price will be more affordable so you will attract more buyers. But location may be the main attraction.


WHO MAY BUY IT?

  • Businesses are frequently handed over to family members.Some may expect the first right of refusal for purchase of the business. Employees of the business are also potential buyers.Decide if the business will be offered to management,staff,or family before engaging a business broker orplacing advertisements in the general media.


WHEN TO SELL IT
?

  • As a general rule, the best times to sell are when the business and your customers or clients are peaking and the industry is likely to attract great interest. Also make sure any key contracts such as your retail lease agreement are not too close to expiry.


NEED SOME HELP?

  •                                                      Please contact me for further information.

                                   Nick Benwell  ACA           Mob 0402 815005                This email address is being protected from spambots. You need JavaScript enabled to view it.