Selling your business can be an exciting time and highly rewarding. The objective is to maximise the value of your business and avoid transaction fatigue that can occur from a delayed sale process.
Ensuring that you are well prepared before taking your business to the market is critical in achieving these two (2) objectives.
Before putting your business to market you should consider the following to help you get ready to sell:
- Intellectual Property – You should check your business names are registered, logos and trademarks are registered and any other valuable intellectual property assets of the business are protected. Goodwill associated with appropriately protected intellectual property greatly increases the value of your business.
- Lease – If your business operates from premises under a lease arrangement, you should check that the lease is current and will continue to operate following the sale. If your business premises is important to the continued value of the business, you should consider renegotiating your lease for a long-term lease to ensure that any buyer is secure in the premises going forward which in turn increases the value of the business.
- Material Contracts & Agreements – If your business has any significant clients or suppliers which add to the value of the business, it is important to ensure that these relationships are appropriately documented in written agreements that are capable of being transferred to a buyer. If a buyer cannot obtain the benefit of these relationships, the value of the business significantly decreases.
- Excluded Assets – You should consider if there are any assets within the business that will not be transferred to a buyer. If so, steps should be taken to exclude those assets from the business and transition them away prior to bringing the business to market. For example, if there is any property owned by the business that will not be passed on to a buyer, appropriate transfers may need to occur prior to sale.
- The Team – You should gather the appropriate professional advisers at an early stage, including accountants, financial planners, lawyers and business brokers in order to put together the best team required to assist you with the sale process.
Taking the appropriate steps at an early stage will not only make your business more attractive to a new buyer and achieve the best sale price possible, but will also reduce the time required to sell the business and the costs associated with negotiating the sale.
We encourage you to contact our Commercial & Business Group led by Lachlan Page at an early stage in order to prepare your business for sale to achieve the best outcome possible.
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