When you’ve made the decision to sell your business, the real work begins. Buyers will scrutinise your practices, financials, human and capital assets and the good will that you’ve generated over the life of your investment.
Taking the time to properly assess and value your business may involve a restructure and for some businesses this can take years to finalise, so determining why you’re selling is critical in determining the factors that will affect the sale of your business.
Reasons for Selling
There are many reasons for business owners to sell up, just as there are many reasons for prospective buyers to express their interest. Typically, your buyer may be looking to expand on an existing footprint in the market or, in the case of a trade, leverage existing business opportunities to increase visibility and market share.
Your reasons for selling may be related to your age, your changing interests, health, or maybe just stagnation in a small business that you recognise could grow under a change in ownership. Ask yourself the most important question of all when you’re looking to sell your business: why sell the business?
Once you’re clear about why your business is for sale, you’ll be able to be clearer and more honest about what you’re trying to achieve and the real value of your business. Honestly and integrity go a long way in getting the best price for your business and more importantly, insures against any surprise litigation after the sale.
While retirement is one of the most popular reasons for selling, business owners are increasingly looking at businesses not only as an income stream but tradeable asset that is part of a complex financial plan. Consider your long-term goal as you ready your business for sale.
Setting Yourself up for after the Sale
Once you’ve sold your business your career doesn’t necessarily need to finish, having an idea on what you’re going to do after the sale is important to bring clarity on your next steps post sale.
When the Time is Right
The best time to sell a business is during a growth phase or increased stability. Selling is also a very time-consuming process, sometimes taking up to 2 years to assess the financials, assets, succession planning and even your own long-term goals. By keeping an accurate account of your revenue, overheads, assets and evaluating your business plan regularly you’ll put yourself in a position to capitalise on the sale of your business at a moment’s notice.
Failing health can be one of the most emotionally and financially devastating situations for a business owner to put themselves into. By planning for the worst-case scenario, your business will be in an excellent position to take advantage of market and personal dynamics.
Invest in a Business Broking Relationship
A good business broker can be the difference between a sale and a windfall. Investing early in a relationship with a business brokerage will ensure you have the details you need to make the most of the sale of your Sydney business.
Click here or call 02 9552 1111 (9am – 5:30pm Monday to Friday AEST) to speak to an expert business broker at LJ Hooker.