If you’re thinking about selling your business you need to take the time to prepare your business for sale so that you can maximise your return.

Selling a business takes a lot of time and effort, it is not something that can be rushed through. Putting in the effort up front can mean the difference between a successful sale and having a transaction fall apart. 

There are two key components at play in the sale of a business: structuring the transaction and positioning the business in preparation for sale. Both elements are important and can significantly impact your result.

Positioning is about doing everything needed to maximise the chances of a sale occurring. Structuring is about getting the best outcome from a transaction once it has occurred.

Structuring the transaction covers areas such as pricing the business, the terms and conditions attachied to the sale, key terms in the contract, and ensuring the transaction structure is as tax effective as possible. The aim when structuring is to maximise your outcomes from the sale. Our commercial lawyers can assist you in drafting a contract for sale that will protect your interests and maximise the proceeds of the sale of business.

Structuring the terms and contracts of sale should be addressed first to help identify any key decisions that need to be made.  A lot of people make the mistake of spending most of their energy on the structuring of the transaction. While the structuring of the business sale transaction is important, it only really becomes important if a sale is achieved.

We recommend that most of your effort goes into positioning the business for sale. To do this, you need an objective assessment of how the business compares to others in its market, its competitive position, and what if any impediments to sale exist – all the things a buyer will look at and look for when they consider buying your business.

When preparing to sell your business you will need to spend time understanding and improving the position of the business in the market. Positioning the business for sale is all about ensuring that you achieve a sale and maximise your price.

Positioning your business for sale covers areas such as ensuring there are no hurdles within the business that will limit its saleability, identifying the competitive position of the business within the market, ensuring that operating profitability is as good as possible, and that the business benchmarks well compared it’s competitors.

To help facilitate a sale of your business we suggest you create a careful strategy, by undertaking upfront due-diligence, getting together the data analysis and business positioning documentation before the sale process even begins. You should work with your accountants to have your businesses' audited financial records available as part of this due diligence process.

Positioning also includes identifying the best time to take the business to the market, how to take it to the market, and who the most likely buyers will be. You can engage with specialist business brokers to assist you with understanding your options and finding your ideal buyer. Our business advisors can help step you through the process of engaging a business broker to help you sell your business.

Some buyers believe that we are currently in a buyer’s market and will try to drive down price expectations.  Whether or not you are in a buyer’s market depends on your industry segment, but regardless of this, you are in a competitive market.

Buyers may be comparing your business to similar businesses but also opportunities in other industries. To secure a sale at the best possible price you will need to invest your time and energy in having your business positioned for sale. Preparation time is needed to achieve this well in advance of putting your business on the market.

Our business advisors can help you determine what you need to prepare your business for sale and guide you every step of the way.