Selling a business is not quick or easy. Preparing a business for sale takes a long time and a lot of patience. An important aspect of the sale of any business is the planning. A buyer will pay top dollar for a business if he or she can see absolute love and attention poured onto the running and maintenance of it. A business with its paperwork in order will be more impressive. A company’s management, financial documentation, and risks, like environment, or legal need to be in plain view. This is so the prospective buyer can assess possible increase in value. Your business figures must be able to stand up to due diligence.
In this post, we’ll take you through in a quick fashion, preparing a business for sale and how to achieve the best price for the acquisition.
Table of Contents
Pre-sale planning for business owners
If your business is attractive to buyers, then there is something that is impressing them. It could be and should be the management of the business. With good leadership comes good running. To make sure the new owners can continue the success that impressed them in the first place, the vendor (seller) must have in place a management capable of the transition. A possible awkward transition will impact the final valuation of the price. The new owner should know they can trust the management to oversee the new era without much hiccup.
Company documents are the lifeblood of any due diligence completion. It is important to have the financial details ready for inspection. A business is more attractive and valuable if the profit and loss and all other details are correct and correctly evidenced. A lazy CFO will be found out when it comes to sale time.
Audits may sound scary but when selling a business, they are brilliant. If you can show a prospective buyer fully professional audit records, the sale may go through smoother and with a higher valuation. This is due in part to the preparation of the numbers. The potential buyer will have more faith in the figures than that of someone who has a room with boxes stuffed with paper.
An organized business is an attractive business. Documents are key here. Detailing such things as workers pensions, trademarks, respective laws, the environment and even the minutes of a meeting will add to the value of your business. There are many professionals to deal with these things, sometimes individually and others can do it all. You’ll need well presented and evidential proof of a successful operation.
Assets are something the buyer will look hard at. If your business has assets that hold back the company or do not generate income, then they need selling in the presale process. This is about cleaning up the balance sheet. Real estate or expensive equipment may affect the running of the business but not play a key role. These should be considered saleable before the business is put on the market. This is because, separately the assets may have value while within the company they hold no value as they generate nothing in the way of income.
Getting a valuation done by a professional is an important part of selling a business. It is not good thinking of a figure in your head. You’ll be more than likely be disappointed. If the valuation comes in lower than expected you have time to correct the issues reducing the estimated value. Making sure of a completely correct valuation is a vey important part of pre-sale planning.
Valuation is based on many factors and adding or reducing aspects will help attain the true value of the business.
You need not fret over the finer details and the obvious factors. Accounting experts can make your books readable and correct. Tax consultants can deal with any costs due to sale. Legal experts can deal with the red tape and contracts. These different professionals all play a key role in ensuring your business is good to go for the highest amount possible.
Business brokers are a game changer when the idea or need to sell a business. They will aggregate all the above and present to you the best possible way forward. The know all the legal frameworks and hurdles to jump. An expert in your area will be worth the fee after the sale has gone through.
Preparing a business for sale checklist
- Have you got your paperwork in order?
- Can your business stand up to due diligence?
- Is your management ready and able?
- Have you engaged the right experts?
- Are non-performing company assets sold?
- Is the business valued right?
If you haven’t got the above ready or underway, then don’t sell just yet. Brisbane Business owners are invited to consider Marc Phillips when seeking a business to buy or sell in the Brisbane, Gold Coast, or Toowoomba areas. Local knowledge and surgical negotiation skills mean a keen eye on every detail and who to get the details from. Marc has a profound knowledge of legal frameworks in all aspects of business sales and is ready to help you sell your business.
Preparing a Business for Sale for Top Dollar (Check List)
Sydney born, having spent six years serving the community as a New South Wales Police Officer before deciding to relocate to the UK where he pursued his passion for sales, the financial markets and the real estate industry.
15 years as a licensed agent, ten of those years in fast-paced markets of the USA and the UK, Marc is an expert in business brokerage.
Business owners are invited to consider Marc when seeking a business to buy or sell in Queensland with local knowledge in the South East Queensland market including Brisbane, Gold Coast, the Sunshine Coast and the Darling Downs.
Local knowledge and surgical negotiation skills mean a keen eye on every detail. Marc has a profound knowledge of legal frameworks in all aspects of business acquisition and sales process.