You have worked hard building your business and are now ready to sell and enjoy the rest of your years enjoying all that Australia has to offer.
Unfortunately, selling your business will likely take much more work than simply posting a for sale sign in the window. Selling a business is not an overly difficult task, but it requires a significant effort.
Start Early
Selling a business is more difficult than simply selling a property, especially since properties here are selling like wildfire.
In order to sell your business as quickly as possible, there is much planning that must take place beforehand.
So, it is necessary that you begin planning and getting everything in order as soon as possible, such as organizing financials, figuring out your business’s value, deciding which broker to use, and so on. But first, you need to decide exactly why you want to sell.
Popular reasons for selling a business are
- Retirement
- Personal reasons
- Dissolved partnership
- Getting out while you can get top dollar
- There are many buyers available
These reasons and more can determine exactly how much you will be able to receive through the sale of your business.
Organize Financials
In order to sell your business, potential buyers will want to see profitable financial returns. This means you will need to have three years of tax returns and financial statements available to show them.
However, you should not show your business’s financial statements to everyone. Instead, require an offer in writing and provide a contingency based upon the review of the financial statements.
Contact Real Estate or Business Brokers and Appraisers
Brokers can be a tremendous asset in the sale of your business. They will be able to appraise the value of your business, inventory all of the equipment, and disclose similar businesses that have recently been sold and at what price.
The brokerage fee can be up to 10 percent of the sale price, but the help they can offer may prove invaluable.
Maintain Organization
Being properly organized throughout the sales process will help you greatly. You need to keep a file of all of the contacts and paperwork involved in the sale of your business.
Keeping a log of potential buyers will help you maintain communication with interested parties in case a certain buyer decides to back out of the transaction.
You will also want to keep purchase agreements, attorney contact information, escrow information, non-disclosure agreements and any other additional important documents in the file as well.
Research the Market
Not only is it important for you to know what comparable businesses have recently sold for, but it is also necessary to know the current conditions of your particular industry. Buyers will place a large emphasis on the growth potential of the business, which will greatly affect the sale price.
This will more than likely require some research effort on your part, but having industry data and statistics will help greatly in the negotiation process.
Understand Your Buyers
Buyers of your business are going to be particularly interested in their return on investment. You need to understand this and be able to show them that their investment will provide them with a decent return.
Usually, buyers will be your direct competition or similar businesses, so they will already know the potential of the business. Having information about your buyers will provide valuable insight about what they are expecting.
Develop a Marketing Strategy
A broker will help you greatly in developing and implementing an effective marketing strategy. However, if you are truly ready to sell, no one will be more passionate about selling your business than you.
There are a myriad of websites and selling tools that you can utilize to effectively promote the sale of your business.
Selling your business can be a difficult endeavour, but proper organization, market knowledge, and marketing strategies will help greatly.
Above all else, it is important that you maintain a positive and productive mindset. Eventually, the right buyer will come along.
If you are interested in selling your business in Australia and would like to find out more information we can help!