One of the decisions you will have to make as a Toowoomba business owner is whether or not to sell your business. There are many reasons why a person would go through with this decision. Maybe they want more time for themselves, maybe they want to retire and do something else, maybe their kids don’t want to take over the family business, or any other number of reasons.
Whatever the reason may be there is one thing that needs to happen before you can sign on the dotted line: finding someone interested in buying it!
It’s easy enough if you know what you’re doing (or if someone who knows what they’re doing helps), but for those who need help getting started, I’ve compiled some pointers below:
This is an essential part of the process. Strengths or weaknesses, possible fails or rouge bookkeeping are all examples of things to watch out for. A broker will analyse the data and brief you on any concerns. Then there is what can be improved on, changed or updated. Growth potential and projections will all be poured over by a good broker.
Business brokers will make sure that the business is presentable before a sale. A good broker, for example, may request the repair of equipment if it’s broken in order to give buyers confidence and boost their appraisal of the company.
Every business depends on employees and staffing to succeed. Contracts and wages will need to be considered moving forward. A star employee may not feel comfortable with the new owners. You’re selling the embedded success of the business, the staff are part of that. Any issues with possible loss of the human machinery may put off the buyer.
The same goes for the customers. After all, they are the ones providing revenue and therefore profit. A broker will ensure these customers will stay on and continue in the success of the business.
You will need to ensure any cash flow issues are taken care of before the sale goes ahead. The buyer may not want this responsibility and it can be an issue that stalls negotiations if not addressed in advance.
The buyer may already run a successful business elsewhere and know what he or she needs to thrive. The sale price depends on the little things as well as the big ones. Especially in the garden city of Toowoomba.
Business brokers will ensure the operation running will continue as is. You may need to agree to continue in some capacity to facilitate the change over. A well-established business is attractive to a buyer and that buyer needs to know it will remain highly profitable.
Depending on the business, a minimum of three years of financials provided by your accountant will be required along with supporting documentation including commercial leases, franchise agreements and state licences when required.
The name of the business and your contact details can be found on these documents, as well as any other potential points of sale such as a website or social media accounts which may not have been included in the initial due diligence process.
If you keep your own books, the buyer will need to know that they are accurate and up-to date. The purchase price is set accordingly with this in mind.
By following the steps outlined above, business owners will have an easier time when looking at selling their businesses on.
If you are planning a business sale in Toowoomba we are a well-positioned and knowledgeable business brokerage. As well as serving Toowoomba in the Darling Downs region of Southern Queensland, we also offer professional business brokerage in Brisbane and the Gold Coast.
Please contact us to discuss your needs, and we will ensure that you are well-informed of the process before making a decision.
Call Marc