Your reasons for selling will help you create a negotiation framework to determine what an acceptable offer might be, so it is critical you be honest with yourself when answering this question.
You also need to clarify the sale objectives of your spouse and/or any shareholders and business partners.
Before you invest time, effort and money in a sales process, make sure you get professional advice and, ideally, a business valuation on the fair market value of your business prior to progressing to a sale process.
This advice needs to come from a credible advisor closely involved in buying and selling businesses; someone who is up-to-date with market transactions.
A valuation for sale purposes is not a theoretical exercise. Ideally it needs to be conducted by an advisor with relevant market intelligence and experience.
Don’t wait until you’re getting offers on your business to understand the potential tax benefits and tax minimisation opportunities that may be available in the course of selling your business.
Get solid advice from your accountant or advisor to ensure you can consider the relative tax-based merits of different offers.
Put yourself in the shoes of a potential purchaser: what would you want to know before making a decision about such an important purchase?
The following is some of the information you need to include in a professional Business Profile or Information Memorandum on your business:
(Our free Selling a Business Checklist contains the full list and you can use it to help you gather and prepare the information.)
Make sure you prepare this information before you begin the marketing process: don’t tease up interest and then disappoint potential purchasers because you can’t meet their basic information requests.
The answers to questions 2 and 3 indicate we believe you need professional support in terms of a business valuation and taxation advice.
It’s also important to engage a solicitor with experience in the sale of commercial businesses, not just residential or commercial properties.
As for engaging a dedicated business sale advisor or broker, that’s up to you and how confident you feel in your own abilities to handle the sale process.
Experience shows that an arms-length advisor assisting you with the sales process can help manage the negotiation process, protect commercial sensitivities and coordinate the due diligence process in a professional way.
Most of all, a business sale advisor should be able to provide you with a competitive market environment for bids for your business.
If you do decide to use a professional business broker or advisor, it’s important to evaluate more than one and to ensure they have the following:
If you would like advice or support with any aspect of selling a business, please contact the team at JPAbusiness on 02 6360 0360 or 02 9893 1803 for a confidential, obligation-free discussion.