THINGS TO CONSIDER WHEN SELLING YOUR BUSINESS
The day has finally arrived when after years of hard work you are ready to sell your business. Or are you? Selling your business requires a lot of work to be done in advance.
Firstly you should have a reliable and accurate accounting system which can show at least 3 years of accounts. It is only from such accounts that a proper valuation can be obtained.
The second step is to ensure that your staff are on appropriate contracts with appropriate restraints on poaching your customers. Such restraints are regarded as void unless they can be shown to be fair and appropriate. This is important to protect the goodwill of your business . If as if such restraints are considered found to be excessive they can be struck out by the courts.
The third step is to ensure that you have appropriate contracts with your customers. A prospective purchaser will want to see that your customers will be likely to continue with the purchaser after the sale.
The fourth step is to ensure that you have time available on your lease with options for further terms. A purchaser of a business that relies upon a certain location will be reluctant to purchase a business if it does not have the ability to conduct the business from the premises for a reasonable period of time.
Having satisfied these steps the next step is to allow prospective purchasers to review the operations of the business, but only after the purchaser has signed a confidentiality agreement, so that your trade secrets and methods of operation are kept secret if the purchaser does not proceed.
The prospective purchaser should also agree that they will not approach any staff to work for them in the event that the sale does not proceed and that they will not employ any of those staff for a period in case they are approached by such staff.
Implementing these steps can make the sale process proceed smoothly and successfully.
For further information about things to consider when selling your business please contact us on (03) 9670 2266.