We frequently deal with business owners that have never sold their business before and who are unsure of how to prepare their business for sale. You can actually add value to your business by spending some time ensuring that your business is organised.
To give your business the best chance at the highest sale price we recommend you:
- MAKE A COMMITTEMENT TO KEEP YOUR FINANCIALS CURRENT. This is a BIG one, so many sellers don’t see the importance however if you can keep your financials up to date and ready for buyers to review you will have a much better chance at achieving a sale. Nothing makes buyers run faster than having to wait weeks/months for the latest profit and loss.
- Check your staff entitlements and be aware that items such as annual leave, sick leave and long service leave (even for casuals) are adjusted on settlement. A lot of sellers don’t think about this which can cause disappointment on settlement day.
- Take care of your plant and equipment. Buyers want to acquire equipment in good working order, any vehicles transferred to a new owner will also be required to have a road worthy. Buyers will also want the plant and equipment unencumbered as part of the sale so make sure you understand that any loans will need to be paid out at settlement.
- Double check that all of your employees are being paid the correct rate. Seek professional advice if you need to about this one. If a buyer finds that the employees are being underpaid they may pay less for your business.
- Review your business processes. Now is a good time to make sure that you have good processes and procedures in place. A business that has documented processes may be worth more to a buyer.
- Be aware of your leasing arrangements. If your business revenue is dependant on location or even hard to relocate and your lease is due to expire, check with your landlord about what options may be available to a new business owner.
- Be sure to keep revenue as steady as possible. Too frequently we see business owners that are ready to exit and don’t keep the business running efficiently. Buyers will pay significantly less for a business that has declining revenue even if the prior few years have been steady. We have seen businesses lose value rapidly due to this factor.
If you would like to know more about selling your business, please give our office a call!