You will need to consider your reasons for selling, the condition your business is in, your current and future goals and how selling or not selling your business will affect you.
If you are determined to sell, it is best to speak to a business broker which you can find on our directory of business brokers. Prior to selling, it is always best to give you and your business time to prepare prior to advertising your business for sale.
Things to consider when you are preparing to sell your business
- Showing year-round profitability.
- Reducing your costs.
- Building a strong management team.
- Maintaining high-quality products or services.
- Developing a unique product or service.
- Expanding your online presence.
- Creating a strong customer base to reduce your reliance on 1 or 2 large clients.
- Maintaining premises and making sure assets are in good condition.
- Signing shorter-term or longer-term leases – whichever makes your business more attractive to buyers.
- Using formal, written contracts rather than informal handshake or verbal agreements.
- Developing comprehensive business, marketing and succession plans to enable your staff to run the business when you sell it.
- Settling any outstanding legal or tax matters (e.g. warranty claims).
Alternatives to selling
The more you communicate with your customers, the more likely they are to buy from you again. Some companies communicate via social media to connect with their customers and when done effectively, customers become more loyal and attached to the brands image.
Making your business self-reliant
If you want to take a step back from day-to-day operations, or need to take a break due to health or personal reasons, you could hire and train new staff to replace you, while still retaining ownership of the business.
Developing succession strategies
Putting a detailed succession plan in place and training your successor to take over will make it easier for you to reduce the amount of time you spend on your business.
Your accountant can help you assess if your short-term debts will become more manageable with long-term financing.
Forming a strategic alliance
Your business may become more successful if you form a mutually beneficial relationship with another business.
Amalgamating or merging
Your business could become more competitive if you amalgamated or merged with another business.
Floating your business on the Australian Stock Exchange may attract enough capital to allow you to continue operating. This wouldn’t be relevant for small businesses as an IPO or reverse IPO generally cost millions in fees.
Ready to sell your business?
If you’ve decided that you will be selling your business after considering all the options, that is good. The purpose of the exercise is not to dissuade you from selling your business but rather to give you the options to make the best decision for yourself, your business, and its employees.