How To Sell a Business: A Quick-Start Guide for Business Owners

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AUTHOR
Bruce Coudrey

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Today, in Australia, there are over 2.4 million actively trading businesses, increasing at a whopping rate of nearly 90,000 per year. Looking at the sheer numbers, it is easy to forget that each business is utterly unique - and so should be its exit strategy. But once you have decided to sell your business, what steps should you take next? This guide by Benchmark Business Sales & Valuations tells you what you need to know about the journey of selling a business. Get started with the overview below.

6 Steps to Successfully Selling a Business

Selling a business can feel like the end of an era. And, in some ways, it is. As a business owner, you might have dedicated time and effort to building a successful enterprise you can be proud of. Now that it is time to sell, it is important to understand the journey ahead and close a fair deal for the asset you have built over the years. When partnering with our experienced team of business brokers, you can count on a structured and thorough 90-day process, which includes the steps below. Our tried-and-tested approach allows you to define a winning exit strategy, determine your business’s real worth, and find the best buyers. Here’s an overview of what to expect.

Step 1: Scout the Market and Set the Right Price (and Expectations!)

The first step is to assess whether this is a good time to sell. To determine this, you will need to look at multiple factors, including your industry and niche, as well as influential macroeconomic factors, competition, and trends. Once you have found a window of opportunity, you will need to determine the worth - and, therefore, the market price - of your business. For this step, we will organise a professional business appraisal, and then compare the results against the industry’s average. Selling an asset as important as your business can be a specialised task that you should not have to face alone. When working with a professional, you can get your questions answered and make sure that your business sells for the right price.

Step 2: Outline a Detailed Sale Plan

While business sales have hit record numbers over the past few years, not all businesses are as easy to sell. To increase your chances of closing a successful sale, you will need to outline a sale plan to use as a guide during the process and keep track of the tasks that need to be completed. This won’t just help you organise your efforts, but it also helps you understand how to add transferable value to your business, so as to increase its valuation.

Step 3: Get a Draft Contract of Sale Ready

Selling a complex asset as a business does not come without pitfalls and risks. That is why you, your legal team, and your business broker will start drafting the contract of sale early on, review each point, and ensure it meets your expectations. By drafting the contract of sale early, you can make informed decisions during the negotiation process and help to prevent you from making fatal mistakes during the sale.

Step 4: Craft an Information Package for Prospective Buyers

Prospective buyers will require a wide range of information and detail about your business during their due diligence process and before making an offer. Getting a comprehensive information package ready beforehand can help you streamline the sales process and inspire confidence in your prospective buyers. Your broker at Benchmark Business will help you collate all the information required and prepare an exhaustive document. Some of the essentials include:
  • Wages details
  • Profit and loss statement
  • Historical financial
  • Business expenses
  • Lease agreement

Step 5: Market Your Sale

If you are a successful business owner, the chances are that you are also a skilled salesperson. This is the moment to resort to your talent and close the right deal! You and your broker will design a targeted marketing campaign that aims to target a specific audience of potential buyers. Your broker might also suggest finding more than one buyer to foster healthy competition between prospects and encourage higher bidding.

Step 6: Partner With a Proactive and Experienced Broker

There are many things to consider when choosing a business broker. However, most importantly, your broker should be proactive and highly experienced in selling businesses like yours. Above all, it is essential to find a partner you can trust and feel comfortable communicating with. Unsure who the right partner would be? Get in touch with our team of brokers and take the first step towards selling your business.

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