They say there are two great days when you own a boat – the day you buy it and the day you sell it. And while we haven’t had the pleasure of buying a boat, it does ring true when compared to business ownership. Sure, you achieved some incredible things under your reign, but the time will inevitably come to hand it over to someone else so that you can explore the next opportunity that exists around the corner. If you are looking to sell your business in the Australian market, here is what you need to know to get the best result through the right channels.
Engage a lawyer from the very start
You could be an expert in a number of disciplines, but the nuances of selling a business are enough to stumble even the brightest mind. By leveraging the expertise of law firms in Melbourne, you can essentially hand the reigns over to them and know that they are operating with your intentions in mind and facilitating a smooth and compliant business sale. A quality law firm won’t just scrutinise potential buyers, but they will also whip you into shape so that your business is a more attractive proposition to a buyer, with all accurate documentation ready to go. They will also protect your interests and lodge all relevant applications – something you won’t have the time or knowledge to do yourself. Cutting corners here will absolutely catch up to you, and it might even cost you a bigger sale amount or a more reliable buyer.
Value your business and decide what’s for sale
Before you have any discussions with any interested parties, you need to have your business valued. This will govern what sort of figure you can ask for, and it will also allow you to make plans for the future based on those parameters. An assessor will need to see a number of things to conduct an accurate business valuation, including financial statement of the last five years, details of physical and other assets, business plan, registration papers, employee details and active supplier and client contracts. They will also do their own research to gauge market conditions, business history and even the locations in which you operate your business. It’s critical, and frankly legal, that a third party conduct this business valuation, as they will give an unbiased assessment unlike you, the owner who has put years and love into this business.
Another factor here is to determine what exactly is for sale. Will you be handing over everything, or do you wish to hold on to your intellectual property and various clients? Having a clear understanding of what is on the table will better guide the process, and will eliminate the chance of you or the buyer committing to something that you didn’t mean to. This is particularly prevalent when businesses choose to sell an arm of their business and still maintain one or more locations. Without a clear roadmap, this could easily be a minefield or lawsuit waiting to happen.
Have a plan for your employees
Taking your business to the market might be an exhilarating high for you, but it might fill your employees with fear and doubt. Before any internal or external communication is issued, talk to your employees and let them know your intentions to sell the business. You also want to deliver this news with a plan that gives them peace of mind in what will be a complicated process. If there is not an opportunity for them to retain their jobs under the new owner or transfer to another business, you need to give them enough notice so that they can seek alternative employment. You must provide a notice of ending their employment or you can provide a payment in lieu of notice. Whatever you choose, deliver the news with empathy and work to ensure they find future employment, which might mean introducing them to other businesses or providing references.
There really is a lot to consider here, but if you are a diligent business owner then chances are you have been fielding this research and options for quite some time. Seeing a lawyer should be your first point, and from there they can outlay what the next steps are and what you can expect. Good luck!
