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Checklist for Selling a Business
Checklist for Selling a Business
Successfully plan and carry out the sale of your business with the help of our comprehensive checklist. Use it as a guideline to ensure you’ve got your bases covered from the planning stages right through to post-sale.
For your convenience, we’ve also included links to our small business directory to put you in touch with useful services you may need when planning your exit strategy and selling your business.
First Steps
- Plan at least 6 months in advance to sell your business.
- Determine whether you and your expertise are critical to the commercial success of the business.
- Establish any conditions for the sale of your business regarding your involvement. E.g. Do you wish to stay on as a manager/employee after the sale or retain some equity in your business?
- Identify potential buyers that you may already know. E.g. family members, employees, competitors or suppliers.
1. Can the business run effectively without my presence? 2. Do any members of my family wish to take over or carry the business on? 3. Am I prepared to stay on after the sale of the business for a period of time? |
Planning your exit
- Consult financial (tax) and legal advisors as early as possible to plan your exit strategy
- Address capital gains tax issues to optimise the proceeds of the sale.
- Restructure the business if necessary to optimise it for sale.
- Compile and summarise financial statements for the last 3 years. i.e. tax returns, profit and loss statements etc.
- Identify positive business trends. E.g. consistent growth over the last 18 months.
- Identify future potential of the business based on independent reports, industry trends and so on. e.g. market growth
- Identify any areas where the business can be improved.
- Identify any potential obstacles to sale. E.g. licensing requirements, non-transferable skills or expertise etc.
- Find a business broker to help you plan and organise the sale of your business.
1. What costs are involved in selling my business? E.g. Advertising costs, legal and accounting fees, valuation reports or business broker fees? 2. If I have a registered trademark, do I want to retain it? 3. Can my business licenses be transferred to a new owner? |
- Monitor the value and sale prices of similar or equivalent businesses.
- Identify all of the assets associated with your business. E.g. property and infrastructure, stock, established customer base, employees, supply agreements in place, trademarks, hand-over training as well as the future profitability of the business.
- Identify any liabilities of your business. E.g. money owed, costs involved with equipment upgrades, repairs or maintenance required.
- Consult with your business broker or valuer to set an asking price.
- Prepare a prospectus or information package for prospective buyers including all relevant business details.
1. Will I be providing training for the new owner/s? 2. What assets will I be selling with the business? E.g. the business premises and equipment. 3. What are the key value propositions for a prospective buyer? |
Selling the business
- Determine how best to advertise your business. E.g. via your broker, online, in business magazines, newspaper advertisements or word-of-mouth.
- Meet with prospective buyers to show them the business premises, discuss the business operations and answer any questions they have in person.
- While you wait for a buyer for your business, continue to operate your business as usual. Don’t allow it to decline.
- Consult your business broker or solicitor when negotiating any sale terms or conditions. E.g. price, training, transfer of leases or restraints on your activities after the sale.
- Take a holding deposit of 10% from the buyer to be held in trust by your legal representative.
- Have your solicitor prepare a contract for sale including the settlement period. (Usually 30 days)
1. Do I want to handle the advertising of my business myself or use a business broker? 2. What terms and conditions of sale am I willing to negotiate on? 3. What is the lowest offer I would be happy to accept for my business? |
After the sale
- Notify your key customers and suppliers and introduce the new owner to them.
- Provide hand-over and training as agreed under your contract.
- Transfer or cancel any business licenses you hold.
- If you employee staff, cancel any insurance policies that you have in place such as Worker’s Compensation.
- Notify your business bank, insurance company and any relevant industry organisations that you have sold your business.
- Notify the Australian Tax Office (ATO) or the Australian Securities and Investments Commission (ASIC) in the case of a company about the sale of your business.
- Notify Australia Post and organise mail redirection.
1. Who do I need to notify about the sale of my business? |
business.gov.au Small Business Development Corporation Business Licence Information Service Australian Taxation Office www.entrepreneur.com |
Important - Read This: This information is intended to provide general information only which may not be applicable to your particular circumstances. You agree to access this information at your own risk and that First Point Media Pty Ltd is not liable to you for the content of the information or any reliance by you on this information.
