What To Consider When Selling Your Business In Melbourne
Selling your Melbourne based business can be one of the most rewarding milestones of your career, providing you with a pathway for doing something refreshingly new. Or perhaps it will afford you a well-earned break from daily pressures.
When selling your business, there are many factors to consider. Some important considerations include:
- What is the market value of the business?
- What is the estimated carrying value of assets and liabilities?
- How much money will it take to sell the business?
- What are the risks and rewards associated with selling the business?
- What is the timeline for completing the sale?
As a specialist taxation and advisory firm, Tax Window can assist sellers and buyers during the assessment phase of the sale.
Business Brokers
It is crucial to use a Melbourne Business Broker to help find appropriate buyers and to guide you through the process of selling your business. Brokers have the experience to find the right buyer and achieve the best price for your business. As a third party they will also assess the presentation and of your business just as a potential buyer would, advising on areas where the business needs improvement before it should be listed for sale.
Lloyds Business Brokers are based in Melbourne. Their team of experienced and qualified brokers can guide you through the process of selling your business.
3 Tips To Prepare Your Business For Sale
- The owner should be redundant
As the owner, if you are the heart and soul of the business, then you have a problem. A potential buyer does not want to purchase a business that requires the existing owner to remain in place. The solution is to systematize, document and delegate your business – making yourself redundant as the owner. Each staff member should have a designated set of tasks and a clearly defined role, which when carried out competently, leads to measurable outcomes. A business that has this in place can easily change ownership without disruption.
- The business should be well documented
Every business needs a plan so that staff know exactly where the company is headed and what is expected of them. As well as documenting procedures, it also helps to document relationships with all other parties involved: Staff, Suppliers, Customers, Competitors, Partners and other stakeholders. It is important for both the seller and the purchaser, that the business’ profit and performance over several years to be well documented. This will help protect you as the seller. It will also demonstrate to the purchaser what performance they can anticipate from the business.
Write up your stock to full value. It Document capital expenditure. Rather than expense capital improvements as repairs and maintenance, capitalize them. This will add value to your balance sheet and improve your demonstrable profit.
- Tidy Up
First impressions count. There are simple practical steps you can take to create a good first impression:- Tidy up your stock. Sell obsolete or slow moving stock. This will improve your sales and your gross profit. Your buyer will be reassured that they are not paying for unsaleable stock.
- Tidy up your premises. Look at your premises through fresh eyes. What would it look like to a potential buyer? The condition of your premises can say a lot about the efficiency and profitability of your company. Sell any redundant machinery and parts that are cluttering your premises.
- Tidy up your balance sheet. Prospective purchasers will be interested in the state of your creditors and debtors. Debtors that are slow to pay have a significant impact on cash flow. The best time to resolve these accounts is well and truly before listing your business for sale. This will create a good impression of the strength of your commercial practices.
- Tidy up your staff. Where possible, get your staff to take up their leave and other entitlements. Ensure they wear uniforms or at least look professional at work. Make sure staff wear safety gear and follow safe working practices when required.
Experienced business brokers play an important role in helping sellers navigate the pitfalls and opportunities associated with the above preparation phases.
Once your business is ready for sale, the Melbourne based business broker will find buyers that are suitable for your business. They will organise meetings with the buyers, attempt to get multiple offers leveraged off each other, and negotiate the final contract of sale.
