Blog & Resources
Points of consideration when selling your business?
Two of the most rewarding and stressful times that you will have with your business is at the starting phase and when you go to sell.
Some points of consideration are:
1. You should always be running your business like you are going to sell it. This will generally mean that it should be performing at its best. Just like when you are going to sell your home.
2. Have you had your business valued? Valuing your business will give you an independent view of what your business is worth. There are numerous ways in which to value your business.
3. Consider the taxation consequences. Depending on how and when you sell your business affects your tax liability and the time the liability will need to be remitted.
4. Are your tax returns and financial statements up to date? This is vital as being tardy in your taxation affairs and business reporting could reflect badly on the business itself.
5. Do you have a time line in place? Usually business sales take a considerable amount of time. The new owners may also prefer that you stay in the business for some time afterwards as a condition of the sale – are you prepared to do this?
6. Is the business too reliant on you and if so can you reduce this?
7. Does your business have capacity to improve and grow?
8. What improvements can be made to the business before you place it on the market?
9. Do any licences / permits have to be transferred to the new owner and if so can this legally be done?
10. How are you going to find buyers? Use a broker? Advertise? Sell to someone in your business?
11. Have you prepared a contract of sale? This is vital so that the buyer can document exactly what they are buying.
12. Advising your employees of the sale and ensuring all their entitlements are catered for – this will aid a smooth transition.
13. Is the sale unconditional or is it going to be subject to finance? Some buyers may also request Vendor Finance – you should be aware of the risks of this.
If you would like to discuss further please contact us:
McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
Phone +61 3 9428 1062