You’ve decided to sell your business, but this terrain is unfamiliar. What is involved? Who should you contact? What does the process entail? In a business sale, there are many factors to consider, so we decided to outline the process, allowing you to begin your business sale journey with a better understanding of the steps involved.
1. Meet with your Broker
Finding the right Broker is key. You want to select a professional with both industry experience and a friendly demeanour, as your Broker will be the point of call for all potential buyers. At Core Business Brokers, with a combined industry experience of 68 years, we have represented sellers from a variety of industries. We pride ourselves on our professional, yet down-to-earth nature, being an honest and reliable guide, leading you through your sale process. One of the Principals is a qualified Accountant who can steer you through the numbers.
2. Business Appraisal
Your Core Business Broker will then appraise your business, looking at the business’ financial history, the current market conditions alongside other variables such as a SWOT analysis that will affect the current market price. It is important to remember that many factors affect the appraisal process and accepting a realistic, achievable sale price will increase the probability of a successful sale. We will tell you what you need to know – not just what you want to hear.
3. Organise Your Financial Statements
Ask your Accountant to organise your financial information, making sure relevant financial statements are available and accurate. When you meet with your Accountant it is recommended that you discuss any tax implications associated with the sale of your business. It is also important to ensure that your exit strategy is both up-to-date and relevant to allow the transition process to be as smooth as possible post-sale.
4. Advertising and Enquiries
Your Core Business Broker will advertise your business on all relevant platforms that are best suited to your industry. Alongside this, they will share your business with their extensive network of buyers and contacts, in order to find the best possible buyer. It is important to note that not all business sales are the same, and therefore advertising options vary for each business. Core Business Brokers will always maintain the level of confidentiality required to ensure your business is advertised discreetly if necessary. Encouragingly, we sell a good number of businesses through our expanding database of buyers.
5. Offer and Negotiation
Interested parties will then submit an offer for your business and any negotiation will take place before the offer is accepted by you, the seller.
6. Potential MOU (Memorandum of Understanding)
At this point, a Memorandum Of
Understanding (MOU) may be utilised. Although not mandatory, a MOU outlines the
agreed terms and conditions. The MOU acts as an assistant for the contract of
sale to be drafted more efficiently. This can lower costs for both the buyer
and seller, as it lessens the ‘back and forth’ between parties when the
contract is being drawn up, thus reducing legal costs.
7. Due Diligence
The buyer will then have an
agreed time period to complete their due diligence. During this time they will
review particular financial statements and other important information to
ensure that the information provided by the seller is accurate, and to also
allow any concerns to be addressed before the settlement date.
8. Contract Preparation and Exchange
Both parties’ Solicitors are then involved in the process, preparing the sale contract and going back and forth between the buyer and seller until the contract is signed. At the time of signing, a deposit is paid by the buyer, which is held in trust until settlement takes place.
Once an agreed period has passed, all issues have been addressed and both parties are happy to proceed, settlement takes place. An up-to-date stock take occurs, the buyer pays the balance of the purchase price to the seller and the seller transfers the business and any associated business assets into the buyer’s name.
For a more in-depth explanation of the process, or to learn how your specific sale journey will unfold, contact Core Business Brokers today, on (02) 9413 2977. One of our professional and knowledgeable team will be more than happy to discuss your options and answer any questions you may have.