Important Tips For Selling Your Business
Are you thinking about selling your business? Selling your business may be one of the most important decisions you’ll have to make as part of the business cycle. According to the Northern Territory Government the average life cycle for owning a business is between 7 to 14 years and many people have thoughts of ‘moving on’ around then.
Before you start talking numbers and figures with prospective buyers or handing over the keys to your business there a number of important factors that need to be considered. These include:
Timing of the sale: the timing is a very important aspect to consider. What is the trend of the market are people looking to buy at the moment? You must only consider selling the business when the general sales in the industry are good.
Market value of your business: what is the estimated market value of your business? It is a good idea to arrange for a professional valuation of your business. You should make use of a qualified business broker to help you maximize the selling potential.
Tax implications: it is important that you know the possible tax implications of selling your business. You will need to speak with an accountant to find out all the financial specifics of the transaction.
Asking price for business: the asking price must be realistic warranted and must be negotiable with the buyer.
Feasibility of sale: ask yourself will the sale of the business improve the current financial position of the business?
If you do get an offer from a prospect who is interested in buying your business you should look at this as a positive sign that your business is viable. It means that the potential buyer has been looking at the strong performance of your business and has identified you as a competitor or threat to the success of their own business. It is a good idea that when such a genuine prospect shows up to meet with them discuss the business and also show them around the place.
If all goes well and the sale of your business is arranged a deposit of up to 10 per cent should be taken and held in trust by your legal representative or solicitor. The sale must then be finalised within 30 days for which full payment must be made. If you have done your homework and followed the due diligence of selling the business then you are assured to receive a healthy profit from the sale.
About the writer: Manish Khanna is the founder and CEO of Business2Sell.com.au a website where business owners and brokers can join the service and list their business for sale in Australia for free.
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