“Sell my business or wait a little longer?” A question that arises to many established business owners at least every now and then. What is the right time and which surprises can you exclude by doing sufficient prep-work? Selling your business can be daunting at times. In our experience, it is best to fully understand the process of how to sell your business before you jump right into it. You might think you know exactly what is waiting for you. Maybe you do! And maybe you don’t. Talking to a business broker will help you to navigate the process but if you’re still in an early stage this is the right article for you to read. We wrote down an outline of the process and share our frequently asked questions!
Sell my business: where to begin?
It is important to put time and effort into the decision-making process. You need to determine whether selling your business is the right option for you. You may want to ask yourself the following questions:
- Are you run down and tired? If so, would you benefit from a break away from the business instead of selling?
- Could the business be run by management?
- Do you have a good support network around you?
- Have you assessed the current market? Is now a good time to sell?
- Will the sale of your business support you financially until you source a new income stream?
- If you sell your business, will this affect you if you decide to continue in the same industry? i.e restraint of trade
- Have you had a discussion with your lawyer, accountant, financial advisor or business broker about your individual situation and the details of the process?
The above questions can be beneficial when tossing up the idea of selling your business. It is important not to make the sale of your business a decision you make emotionally or take lightly. As with all other business decisions, it should be planned, calculated and thought through thoroughly.
Sell your business-checklist
One of the most important aspects when preparing to sell your business is to organize the operation to allow for a smooth transition for the new owner.
- Documenting all procedures and policies
- Ensuring all staff have adequate job descriptions
- Obtaining written confirmation of agreements with contractors and suppliers
- Getting rid of anything that may be obsolete or unnecessary to the everyday running of the business
- Presenting your business well both on paper and in-person
- Tidying up the premise(s)
- Checking details such as the lease expiry to ensure it is not up for renewal during the sale of the business
- Paying or collecting any outstanding debts owed
- Organizing all business financials from a minimum of the last three years and ensuring they are up-to-date and accurate. This information will be used by Accountants and Business Brokers during the process
Does the above raise more questions than answers? Let us take you through the frequently asked questions we receive about selling a business.
Frequently asked questions when selling your business
When you have answered all of the above questions and you have found that selling your business is the right decision, you will have lots of questions about the actual process. We provide you with the most important questions:
Do I use professionals to help me sell my business?
Selling your business is not something you should take lightly. To optimize the result of your life work it is important that you have the right people to assist you in the selling process. At GMO we have the best business brokers to help you navigate the selling process. You need someone who knows the market, has the right connections and who can scale the value of your business. You want someone reliable because you will give them a lot of confidential information about your business. Using a professional is definitely a good idea when you are ready to sell your business.
How to determine my business worth?
Valuing your business before selling is very important! You want to know that you’re getting the right price for your business. The value is made up out of the goodwill of your business, any plant and equipment value, the stock and trade and the intellectual property of your business. We wrote a whole article about valuing your business and about how to determine the price of your business. Reading the article is a good starting point to get more insight into what it takes to value your business.
How do I find the right buyers when I want to sell my business?
There are several ways for you to find buyers when selling your business:
– Your business broker will help you to find (the right) buyers for your business. They have a large database with potential clients that are looking in buying a business.
– Place advertisements online and in publications potential buyers are interested in. Your business broker can help you create and organize ads and post them on several platforms.
– Notify everybody in your network. Think about family, friends, (former) employees.
– Spread the word on social media! The more people know you want to sell your business, the better.
How do I negotiate the sale of my business?
Congratulations, you have found the perfect buyer for your business! Now the negotiation starts. Beforehand you and your business broker have listed what you want to get out of this important sell. Are you willing to make any compromises to meet the ends of the buyer? What if it is the right buyer in every way, except in meeting your financial needs? Will you walk away when you are not getting the right price? Do you know when to walk away? As the negation part can get quite emotional it is very common to let the business broker of your choosing negotiate the best deal for you. Both parties will walk away fully satisfied when the deal is sealed.
How do I prepare the contract?
Once you have sold your business successfully it’s time to talk about how to set up the contract. The settlement of selling a business is a serious document. You will need the best experts and professionals for this part. The contract should include everything that is necessary for the buyer to continue the business. Also, very important, is that you gain information from a lawyer and have him or her review the contract. Your lawyer will advise you about the exact terms of a business sale contract.
What happens after the contract has been signed and I sell my business?
When you have taken care of everything, the contract has been reviewed by a lawyer and everything else is in order and complied with, it is time to hand over your lives work and make the transfer official. This means transferring any permits, licenses, and leases that you might have. As well as office keys, domain names, security codes, alarms, and computer systems.
Sell your business with GMO Business Brokers
Here at GMO, we take great pride in developing a comprehensive Business Profile on your business, which utilizes the information stated above as well as other financial, operational and historical information about your business. Alongside potential Buyer’s due diligence, our Business Profile will outline the business opportunity in a straight-forward, clear and concise way.
Before the Business Profile is given to prospective Buyers, GMO ensures that if required, a Confidentiality Disclosure Agreement is read, signed and returned to keep the business sale in question confidential during the sale period.
Once a Buyer is sourced and they are happy to proceed, GMO continues the process by managing the business negotiations, meetings, writing the offer and acceptance form ready for signing by both parties and ultimately seeing the process eventuate in a successful business sale.
If you have been contemplating selling your business for some time, contact GMO Business Brokers on (08) 9481 4422. Whether it is a question about the process, chatting to a qualified Business Broker about the state of the market, or scheduling a face-to-face meeting to discuss your personal requirements, we are always happy to help.