Want to Sell Your Property?  Do so on Australian Property Sales
SydneyBusinessSales.com.auMelbournebusinesssales.com.auAdelaideBusinessSales.com.auPerthBusinessSales.comBrisbaneBusinesssales.com.auNoosaBusinesssales.com.au

How to sell a business

Written on the 8 December 2021

There are essentially two major steps in selling your business.

Step 1: Business readiness

Your first step is to gear the business so it is ready to sell. This means understanding the business, the potential buyers and valuation methodology so that you have the best chance of selling your business and maximizing its worth.

In most cases this process should commence 2-3 years before you intend to sell the business. Most businesses start reviewing their business and preparing for a sale 3 to 6 months before they decide to sell. This then reduces your ability to maximise the worth of the business by altering some of the basic business fundamentals.

You need to follow these steps:
 
  1. Business review: Conduct a business review which focuses on how to emphasize the businesses strengths. What are the weaknesses? Are there some major strategic areas, product development, employee or legislative work that we can complete prior to selling the business that will multiply the worth of the business? For instance, is the business in the owners name? This is often a factor that would lead to a reduced sale price of the business as the business is seen to be reliant on the goodwill of the owner.
  2. Business systems checklist: Understand what systems the business has and determine the areas of weaknesses. If there are weaknesses that can be changed, start immediately. Set a joint action plan and develop templates to help the business reach an acceptable standard. (Job descriptions, policies and procedures, employee manual, production manual etc)
  3. Business mentoring: Get monthly advice and guidance on the direction of the business from someone that is experienced in the area. Explore directions that will maximize the ultimate price.
  4. Business profile: Analyse the business to a level at which you understand the strengths and are able to portray the strengths of the business in the best light to potential buyers. This is then written into a two page profile.
  5. Agree on a basis for business price and concepts for deal structures: Understand the concepts of business valuation and explore possible best outcome deal structures and modeling methodology. Have all shareholders agree.
  6. Develop a simplified strategic plan: Potential buyers are interested in the future of the asset. An overview document should be produced which will highlight the growth path of the company.

Step 2: Find a buyer and sell the business

  1. Prepare a detailed information memorandum: This document would explain your markets, products and financials and is a detailed listing of your business strengths and market opportunities. It also lists your intellectual property and your intangible assets.
  2. Market your business: Develop a broad based marketing plan based on financial or strategic investment considerations. This plan would be tailored to suit your business. Look at your industry and your business. Look at the possible types of business buyers and then construct a campaign around this target market. In many cases your company would make direct contact with acquisition managers of large companies and utlilise the contacts and resources of possible business brokers that have a network across a broad range of industries. The final campaign will generally include a combination of the following:
  • Newspaper advertising
  • Campaigns direct to potential buyers
  • Internet advertising
  • Magazine advertising

Negotiation: You need to then negotiate with the interested party considering the following:
  • Initiating contact with the decision makers.
  • Establishing trust and confidence in your business and the negotiation process.
  • Building a relationship and a rapport with potential purchasers.
  • Ensuring a negotiation style that places you in the best position to maximize the price.
  • Exploration of deal winning formulas such as strategically examining your business and the potential acquiring partner and developing a blueprint for how the merged synergies may operate.
  • The selling of the vision of the potential combined entities to maximize price.
Agreement: Once agreement is reached you draft an action timetable to ensure the transaction is completed in an efficient and timely manner.

Reference Links

For Business Buyers

For Business Sellers

Subscribe for Business Alerts or Sales Tips

Email Address*
First Name*
Mobile Number*
Enquirer Type
Subscription Options
  
* = required

CONNECT WITH US:

Australian Business Sales - find a business for sale in Brisbane, Noosa, Sunshine Coast, Gold Coast, Sydney, Melbourne


Latest Business Sales Articles

1. What is the difference between a business valuation and a property valuation

2. Value your Business read more

3. Land a Private Placement to Fund Critical Investments read more

4. Price Optimize for Your Best Customers read more

5. Prioritize Your Debt read more

Read All Articles



Proud Members Of:


View All the Australian Business For Sale Listings

Search for the latest business opportunities for sale in australia

Sell your business. Create a DIY Advertisement

Sell your business, business broker







Go for Gold
Use the Industry Leader 
in Business Brokerage

Sell your business, business broker, euquiry


 


HomeBookmark This SiteTell A FriendContact UsBusinessPropertyFor BrokersMy Account