Even if you’re not ready to sell your business just yet, or your retirement is years away, planning and preparing your business for sale should start today.
Having a sale-ready business puts you in a position of strength and ready to capitalise on opportunities as they arise.
Naturally you want to get the best sale price for your business. A price that fairly represents the years of personal and financial commitment, particularly if, like many business owners, you’ve not paid yourself regular wages or super contributions.
Here are three tips that can help you get your business into a sale-ready position.
#1: Start early and get your accounts in order
Fully maintained business accounts over a period of years demonstrate the financial health of your business.
Clearly, a prospective buyer is more likely to be interested if your accounts show a profitable business running at optimum efficiency with long term customer contracts in place. Complete financial statements can also significantly help a buyer with the due diligence process as well as add to your credibility.
Quality accounts with meaningful financial figures will help you too. Providing a better understanding of your business performance, you may identify strategies that can increase efficiencies and profitability. While helping you reap the benefits in the short term, it will also contribute to a better sale price when you decide to sell.
#2: Prepare for the unexpected
If you needed to sell your business quickly due to a critical illness or the death of a business partner, you may be forced to sell the business at a substantially reduced price if your business affairs are not in order. That’s why it’s so important to implement contingency plans.
Protecting your business through appropriate insurances and by implementing a Buy-Sell Agreement can help to outline the wishes of the business owners and plan for strategic exit decisions, rather than reacting to circumstances if the unexpected were to happen.
#3: Consider your business structure
The business structure you started your business with may no longer suit your business needs or be the most effective structure for selling the business. Certain business structures allow more flexibility and tax efficiencies when it comes to ease of exit, financing and borrowing. It may be advantageous to restructure your business to facilitate a more tax-efficient business sale. There are a range of advantages and disadvantages associated with different business structures that consider needs when selling your business, so it’s important to seek advice.
We are experienced accountants and business advisors, and our team is well versed in helping business owners prepare their businesses for success now, and sale later.
We can help you prepare your business accounts towards maximising the sale price while giving consideration to matters such as goodwill and applicable small business CGT concessions, with the aim of minimising tax and GST on the sale.
As business owners as well as accountants and business advisors, we have more than 40 years of combined experience and an expansive repertoire of insights derived from working hand-on with hundreds of businesses. We can help you prepare your business and put you in charge of your future, empowered to negotiate with confidence, with a full understanding of your business worth.
Acting as a central coordinator, we can bring together a team of professionals, including business brokers and lawyers, to assist with the sale of your business.
If you would like to discuss life after business in further detail, or would like a second opinion, we encourage you to make an appointment. Contact us today on 03 9708 8801 or email info@rvpartners.com.au
Life after Business
Article #1: ‘Life after Business’ – CGT concessions and selling your business
Article #2: ‘Life after Business’ – Where will your income come from in retirement?
General Advice Disclaimer: The information contained within this document is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Robinson Voss Partners (RV Partners) strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances.
