Selling Your Business in Australia: Follow These Important Steps  

If you’re a business owner in Australia and you are looking to sell your business, there are some steps you can follow so make the process as easy and profitable as possible

Determine your business’ worth

The first thing you will need to do is to work hand-in-hand with your accountant to determine exactly what your business is worth.  

Keep in mind that your business’ current-day value has little to do with what you paid for it, and more to do with the marketplace.  

You should also know that an industry often dictates how a business is valued, which will vary based on current market conditions, trends and the like.  

Resources to help you determine your business’ value include:  

Market research  

The Australian Bureau of Statistics  

Financial benchmarking information  

Statistical information from state and territories government    

In determining your business’ value, you will also need to strongly consider its future earning profitability.  

This is a lot for any business owner to understand and factor into the overall equation, which explains why working with a professional accountant or brokerage firm may very well be in your best interest.  

As a business owner, you are probably already working with an accountant, so you can talk to him or her about this.  

When it comes to working with a business broker, unless you purchased your business from a broker, this may the first time you have worked with one.    

Maximizing your selling opportunities

Australia continues to get international attention because of its thriving economy and the many opportunities it offers. But how do you reach international buyers who may already be looking to buy a business like yours and, what’s more, may be willing to pay top dollar?  

After all, letting buyers know about your business is your main goal as you position to sell it, and these efforts need to reach far past just the local level if you want to truly maximize your selling opportunities.  

This is just one reason to obtain the services of a business broker.    

Business brokers

Not only will a business broker provide you with a more extensive reach, allowing you to target potential buyers worldwide, but a business broker will work diligently on your behalf, with the shared goal of selling your business in Australia, focusing on what they do best while freeing you up to continue moving forward.   And, because selling your business is what a broker is paid to do, they will work with potential buyers to explore financing opportunities that might not be readily available elsewhere.  

The result: You get top dollar for your business!  

Aside from this, just as you are the only person who truly knows your business, a broker knows his or her business, which is to sell yours! Business brokers are proficient in selling businesses of every size and within every niche and can be an important component to a successful transaction.  

Likewise, because business brokers connect buyers and sellers regularly and oversee every step of the tedious transaction between the two parties, their knowledge in this area is simply unsurpassed.    

Understanding your role

You will be responsible for providing your broker with the information he or she needs to market and sell your business.   Most business buyers are looking to generate a new source of income. In looking to determine if this is possible with your business, they will want to know the following information, which you should provide your broker:  

• How many years has the business has been operating successfully?
• Can the business continue to thrive after it’s sold?
• Will the seller provide training?
• Quality, price and reputation of the business's goods and/or services?
• Are the employees skilled?
• Will the employees remain with the business after the sale?
• Is the plant and equipment in good order?
• Are the financial records accurate and well maintained?
• How much money is owed by the business, and will the buyer take on liability for any debts?
• How much work is involved in running the business?
• Is the business worth the asking price?
• Why is the business being sold?   

Of course, if you don’t know the answers to these questions, you will want to work with your broker to determine these, for this information should be provided to potential buyers as soon as your broker determines the potential buyers to be serious.  

Your important information will be fully protected and your broker will not release it until the potential buyer has signed a privacy agreement.    

Handling an offer

When your broker receives an offer on your behalf, he or she will go over it with you in great detail. Together, you will determine if the offer is acceptable based on asking price, conditions set forth in the offer, etc.  

You and your broker will determine what areas of the offer should be negotiated further on your behalf.   Additionally, a 10% holding deposit will be collected and held in trust by your broker.    

Sold!

 Most business contracts require settlement within 30 days; however, some may not be fully settled for 6-8 weeks.  

Once finalized, you will receive payment in full for your business. The new owner will be granted access and any agreed upon training or transitional steps will begin (both of which would be specified in the accepted offer).