Selling a Business
Weigh up if selling is the right choice for you
When it’s time for a change, or things start to get tough, it’s tempting to try to sell your business, but this isn’t always the best decision for you.
If your business isn’t profitable, it will be much harder to attract a buyer — let alone a buyer who will pay you a fair price. Consider seeking advice from a professional, you might be able to get things back on the right track and make a much better return if and when you do decide to sell.
You might also want to consider getting help or advice instead of selling if you’re having difficulty complying with government regulations.
Another thing to consider before selling is how will it affect your personal circumstances? How will your income change, and how will this affect your lifestyle and retirement plans.
Getting the timing right
The sooner you can start preparing to sell your business, the better. Two years or more if possible. Preparing to sell your business will help you improve your financial records, business structure and customer base — making your business more attractive to buyers and aid to ease the transition when you do sell.
Get your business valued
The next step is to determine how much your business is actually worth so that you don’t price it too high or too low. Contact an appraiser (like CCABA) so that you can get a detailed explanation drawn up. This document will provide credibility to your asking price.
Decide whether to sell on your own or use a business broker
Selling a business can get complicated and time-consuming. Business brokers are professionals who specialise in buying and selling businesses, we understand the legal and government requirements streamlining the process, saving you time and stress.
If you’re selling your business to a trusted family member or current employee you can save some money by doing it yourself, but you will need to weigh up if the extra work, time and research are worth it for you.
Get your paperwork sorted
Selling a business involves a lot of paperwork. You will need to collect financial records and tax returns dating back 3–4 years and review them with an accountant. You will also need to compile a list of all assets that will be sold with the business, contacts related to operating the business (suppliers, contractors, IT workers etc) as well as copies of important documents such as your current lease or operations manuals.
Find a buyer
Finding a buyer can be difficult, especially when you don’t want the whole world to know that your business is for sale.
When you do find a prospective buyer, don’t just stop at one. Sales can and do fall through, so it’s best to two or three potential buyers lined up, just in case. Make screen your prospective buyers to see if they pre-qualify for finance and have them sign a non-disclosure agreement before giving out any information about your business.
Take care of your employees
It’s important to be honest with your employees as to what will happen to them when
the business sells.
When selling your business, your employees way either:
- Transfer with the business to the new owner
- End employment with the business
Either way, when you sell your business, it will also end your employees position with you, so you must give them notice of the termination of their employment or provide payment in lieu of notice.
Decide what to do with the sale profits
If you have the luxury, you should take some time to decide what to do with the profits from the sale (preferably at least a few months.)
At this point, speaking to a financial advisor is a good idea. There may be tax implications associated with sudden wealth.
You should create a plan for what you want to do next, and how you will leverage the profits to help you act out your plan.
Selling commercial/industrial real estate
Getting the timing right
An active sales market might seem like the perfect time to sell, but don’t be fooled, a slow market can often mean an investment opportunity for new business ventures. Fluctuating real estate prices make it critical for you to carefully observe the market so that you’re in the best position to act when things swing in your favour.
Figure out which improvements matter
Is your property ready to sell as-is, or are there necessary updates and changes to be
made first? If your property needs some work, you’ll need to find someone to do the job.
Utilise the internet
The first thing that the majority of people do these days when looking to buy in go to the internet. Making sure that you have a eye catching listing is critical.
Invest in quality photography
In order to attract buyers, it is absolutely vital to present your property in it’s best possible light. Buyers buy with their eyes not necessarily from what they read.
Prepare all the things!
Buyers are scared of what they do not understand, the more information you can provide them with, the more peace of mind they will have, meaning you’re likely to get a better price.
Make sure you’re familiar with the selling process
There’s the listing price, and then there are the many, many details that will require negotiation, all of which means it’s extremely important that you understand the finer details of selling your property. You’ll need to keep on eye on individual details to move the transaction smoothly along.
Do your homework
Selling an industrial property is a complicated endeavour that takes time. The most important place to begin is by researching everything from marketing to the local market to the contract. Remember to be patient.