Buying a Business Selling a Business NSW Lawyers

How do I sell my business? Is your business read for sale?

Probably all business owners have some sort of plan as to how they want to retire from “the business”. For many business owners, the plan will involve selling the business or a share in it…and if all goes as expected there’ll be plenty of time to make sure the business is ‘market ready’… in the same manner you would if you were selling your home.

However, by now you’ll know that things don’t always go to plan. The moment when you want to sell your business is just as likely to choose you, as you are to choose it… a sudden urge to travel or have a tree change, a bad health outcome for you or a member of your family, or an interested but unexpected purchaser knocking on your door, are just some examples.

Unfortunately, we’ve seen many clients with financially strong businesses end up disappointed or distressed that this hasn’t translated to a sale price anywhere near what they expected. This is usually the result of selling the business before the ‘house is in order’.

Getting your business ‘market ready’ requires you (with help from your advisors, where necessary) to thoroughly undertake your own ‘due diligence’. Remember, a purchaser doesn’t know your business like you do and will be looking at it with a sceptical, critical and conservative eye, trying to assess its true value.

When undertaking due diligence, a prospective purchaser will treat any real or apparent ‘gaps’ that are discovered in the compliance, financial documentation or operational aspects of your business as risks. Consequently, the prospective purchaser will expect a reduction in price or some other protection (such as warranties and indemnities) or they might walk away altogether!

So to make sure your business is ‘market ready’, either for a planned sale, or just in case the moment to sell chooses you, we recommend you plug all gaps now.

Selling your business in NSW? Pay particular attention to:

  1. Regulatory approvals, licences and permits – do you have all the ones you need and are they up to date? – if not you won’t have a deal.
  2. Notices issued by authorities – unanswered notices are like waving a red flag to a bull.
  3. Tax and other filings – make sure they’re up to date.
  4. Business contracts with significant customers and suppliers – make sure they are in writing – purchasers are wary of businesses that rely on unwritten contracts.
  5. Registering intellectual property rights that are key to your business (such as a trademark, business name, design or patent) – purchasers will require this protection.
  6. Collating and organising all business documentation – this will project to a purchaser a culture of compliance and organisation.
  7. Claims and Commercial Litigation – be aware of the status of any actual or potential claims or litigation – purchasers will naturally have reservations and expect an explanation; and
  8. Financial Statements – make sure they’ve been properly prepared and supporting documents are available for verification by a purchaser – gaps and anomalies spell danger.

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