The decision to sell a business is often one that is difficult to make and carry through. This is because many owners are emotionally invested in the business that they have created and grown over the years. While the key is to maximise the price you obtain for your business, there are a number of top tips when selling your business that you should be aware of to ensure that the sale proceeds smoothly.
Brokers can assist you both in sourcing purchasers and maximising the sale price that you obtain for your business. It is therefore worth considering in retaining a broker.
Retain a good accountant
You should engage your accountant to assist you in ensuring that the business’ financials are up to date and accurate. With a small business sale (one that is sold for less than $350,000), you will also need your accountant to assist you in preparing a section 52 statement. This is a document which must be provided to a purchaser before they sign the contract. Your accountant can also assist you in ensuring that the sale is structured in the most tax-effective way possible.
Retain a good lawyer
Having a lawyer prepare a detailed contract of sale for your business is a must. The contract is crucial because it will address all of the important parts of the sale including:
- the price;
- settlement date;
- list of assets being sold;
- transfer of employees; and
- transfer of premises leases and relevant licences required to operate the business.
The lawyer should also be involved in assisting with any due diligence, pre-settlement matters and attending settlement on your behalf.
Running business until settlement date
Some owners stop operating their business in the usual and normal manner as soon as contracts are signed and exchanged. This is a mistake that can lead to disputes with a purchaser after settlement if the revenues or profitability of the business decrease. You should therefore ensure that you continue operating the business in exactly the same way.
The friendly staff at Parkston Lawyers can assist you with the sale process. Please do not hesitate to contact us should you require any assistance in that regard.