The decision to sell your business is a very significant one to make – and the process of selling a business can be anything but simple. Selling a business requires much more than simply finding a buyer at the right price.
When you make the decision to sell, be sure that selling is right for you and your current circumstances. Would outside advice help you to keep the business longer, if that’s what you wish to do? How will selling affect your financial and personal circumstances?
Determine from the outset whether you intend to go it alone or to use the services of professional and reputablebusiness brokers (in Sydney, for example). Business brokers specialize in buying and selling businesses; they are experts in all steps involved in selling plus in the legalities involved in the process, and have the tools and know-how to take much of the stress out of the selling process.
You will need to value your business realistically for the current market. It includes assessment of the value of assets, estimates of future profits, and the valuation of already established client goodwill.
Finding a buyer for your business can be achieved via using a business broker, utilising current networks, advertising online or in the newspaper, using industry contacts, via word of mouth, advertising through trade publications, and, if you are confident that it won’t harm the business, by notifying customers of the intent to sell – word of mouth can draw out interested parties.
Negotiation of the sale with interested buyers is another critical step. You must provide accurate and open information about all aspects of the business. Agreement must be made with the buyer with regards to the sale price, amount required for deposit, settlement period, handover training for the buyer if required and requested, and concrete arrangements for any existing employees.
Sale contracts in NSW are drawn up by a solicitor. Sale contracts cover all aspects of the sale, including relevant included assets for transfer, relevant liabilities for transfer, responsibilities of the buyer to employees, and legal restrictions on trading in competition with the new owner.
Employees of a business being sold may either be transferred with the business to the new owner, or they may terminate employment with the business. Employees are entitled to be informed of whether they will be transferring or ending their employment. If transferring, all relevant employee records and information must be handed over to the new owner. Some employee entitlements must legally be recognized by the new owner, whereas others do not.
Finally, legalities and tax implications must be dealt with – do capital gains tax or goods and services tax apply to the sale of your business? You will also need to transfer licenses, permits, and leases; finalize business activity statements and tax returns; and cancel ABN and either cancel or transfer the business name.