Fail to plan, plan to fail! As this famous saying highlights, the key to selling your business the smart way is to ensure you are prepared. Being organised will make this process much easier, which is why we have put together a list of all the things you will need to have prepared before you commence.
- Previous 3 years’ Profit and Loss and Balance sheets
- Copy of previous 12 months’ BAS (Business Activity Statements)
- Copy of last 3 years’ tax returns.
- List of Aged debtors – 30, 60, 90, and 90+ day accounts
- Monthly turnover (in bar chart form if possible).
- Detailed list of plant & equipment, and fixtures and fittings including vehicle details; year, rego#, model#, VIN#, mileage
- Signed copy of lease on premises together with any deed of assignment, extensions and covenants
- Signed copies of leases on equipment
- Copy of any franchise or licensing agreement
- Full details of all personnel, (length of service, qualifications, rate of pay, number of hours worked per week)
- Business Number – Office of Fair Trading, QLD.
- Australian Business Number (ABN) – ATO
- Australian Company Number (ACN)
- Brief description and history of the business
- Selection of photos of the premises
- Have a genuine, realistic expectation of the probable sale price
Now that you have these things secret ingredients sorted we need to work on your magical method to ensure you get the best returns from your business.
Do it at arm’s length using reputable, licensed brokers. This will save you an enormous amount of time, by presenting suitable, fully qualified buyers who are able to complete the transaction, but in also handling all the myriad and specialised details involved.
2. Produce the full financials from your accountant, not from your own computer.
No serious buyer will accept anything other than accountant’s figures, and we are only going to bring you serious, qualified buyers.
3. Provide a complete and up-to-date list of Plant & Equipment.
4. Price the business correctly – neither under-valued or over-valued.
As always, the market rules, no matter whether you’re selling a house, a car or a business. The value is what a ready, willing and able buyer is prepared to pay.
5. Be aware of the potential of the business.
Be able to point these out to the prospective buyer. Though these factors may not increase the actual sale price of the business in strict dollar terms, they never-the-less underpin the sale and give the purchaser more security in making his decision.
6. Tell the staff.
Nearly all buyers of businesses are desperate to retain the staff and often insist on a special condition in the contract stipulating that the staff remains with the business after they take over. The staff knows the way the business works inside out; they know all the customers, the suppliers and how the systems work, so why would a buyer want to lose them?
7. Smarten it up. We always sell a well-presented business faster, and we get more money for it too!
8. Be prepared to spend the money to promote it. It’s hard to sell a secret!
9. Don’t give up!
Some businesses are harder to sell than others, usually because they require highly specific skills to run them; just hang in there, it will be worth it.
10. Always, always tell the truth.
We have seen sales that were absolute certainties fall over because the vendor was deceptive. If a serious buyer finds out that one thing has been told to him incorrectly, he’ll assume there’s more or worse also hidden and will back away.
There is lots of things to consider when it comes time to selling, but with the right ingredients and the correct method you can bake up a delicious success story! Redmako Business Sales specialises in helping you taste the reward of your hard work, so get in contact with us today for a confidential chat!
“The winner is the chef who takes the same ingredients as everyone else and produces the best results.” – Edward de Bono