With a steadily aging population we are seeing many ‘baby boomers’ who, having built up successful businesses, are now looking to sell those businesses and establish a financially secure retirement.
For anyone selling a business that they have worked hard to build up, they will want to maximise the proceeds from the sale and one of the key factors in doing so is how you prepare your business for sale.
“The majority of business owners who sell their business don’t plan ahead in preparation of a sale. In most cases, a lot of things that could have increased the value of the business and decreased the risk for buyers were not done” said Pat Hodby, Director of Perks Integrated Business Services.
The key with preparation is to get started early, so get started today! This preparation can take some time, so it’s better to start preparing earlier rather than later.
Some of the key steps to ensure your business is sale ready include:
Get your advisory team in place – Surround yourself with a great team of experts who can guide you through the process. Your accountant can help you to ascertain where the business is now, what needs to be done to get it sale ready and then oversee the team of experts including advisers and lawyers to execute that plan.
Get a business valuation – It is important to obtain a realistic idea of what your business is worth from an objective outside source. A professional valuation will give you a basis for gauging buyer offers and will give you an idea of what you can expect to net from the sale. It will also tell you you’re business’ market position, financial situation, strengths and weaknesses.
Prepare your financials – Buyers evaluating your business generally require at least three years’ worth of financial information. The financial statements of the business need to be as current and accurate as possible. Many businesses have their accountants assist them to put the statements in order so that the business presents well.
Consult your business advisers – It is wise to speak to your accountant or financial adviser for help planning your financial future. Understanding your personal and corporate tax situation may help you recognize your options with regard to deal structure.
Organise your legal paperwork – Review your incorporation papers, permits, licensing agreements, leases, customer and vendor contracts. Make sure you have them readily available, current and in order.
Management structure – If as an owner, you’re absolutely vital to your business, who will a buyer be able to turn to for help running the business after you leave? You should have a succession plan in place before going to market.
“At Perks we have assisted many clients prepare their business for sale which has resulted in good outcomes for the owners. We look at your business objectively, identify the risks and limitations and help put together a plan to maximise the sale of your business” said Pat Hodby.
For more information on how you can prepare your business for sale and maximise its value call Perks today on 8273 9300.
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