Selling a business, what are 5 things to consider?

If you are thinking of selling your business in New South Wales, here are five things you should consider at the start of the process:

1. Valuation

Get a professional valuation to understand the fair market value of your business. This will help you set a realistic asking price and negotiate effectively.

2. Financial Records

Ensure your financial records are accurate and up-to-date. Potential buyers will generally want to see profit and loss statements, balance sheets, and tax returns for at least the last few years.

 3. Legal Compliance

Review all legal and regulatory obligations to ensure everything is in order, including licenses and contracts. Ensure everything is in order to avoid complications during the sale. A business lawyer can assist with this.

4. Transition Plan

Consider how you will transition the business to the new owner. This may involve training, introducing them to key clients or suppliers, and ensuring a smooth handover to maintain business continuity.

5. Prepare a heads of agreement/term sheet

While not essential, we recommend preparing a heads of agreement/term sheet setting out the key terms of the transaction. This helps with the negotiations with potential buyers, and makes it easier when it comes to preparing the contract. A business lawyer can assist with this and help safeguard your interests. 

Taking these steps can help facilitate a smoother sale process and maximise the value of your business.

Once you have taken these steps, or once you are ready to prepare the heads of agreement/term sheet, you should contact a business lawyer who can prepare the documents on your behalf, negotiate amendments to the contract with the buyer and proceed to exchange contracts and settlement of the sale of business.

At Kells, our business lawyers will provide tailored guidance to your specific needs of the business you are selling.

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