Hi,

How to make real money when you sell your business.

There is a great deal of talk in the market at present about succession and exit planning. In our experience, many business owners are poorly prepared when it comes to selling, which not only makes the business more difficult to sell, it often means the business sells for less than it should. Ultimately the business owner pays the price.

In ABCs quest to provide more value to business owners, we have discovered a workshop series designed to help business owners maximise the value of their business prior to sale. It is run by Michael Green from Maximus and we have organised for Michael to run a special workshop series for ABC beginning in late September. Places are strictly limited and we have negotiated $500 off the normal investment. We have personally attended these workshops and believe that they are an outstanding investment, as improving the value of your business through proper planning and presentation can add 20% or more to the sale price.

To find out more about the workshops and how succession and exit planning applies to you, please contact Michael Green (027 567 1084) or visit www.imaximus.co.nz (click on ‘succession planning and exit’ and also ‘FAQ’ page).

Regards,

Steve Smith AREINZ
MANAGING DIRECTOR
 

This is a vibrant specialist import/distribution business dealing with an exciting industry within the New Zealand and Australian market places. The company is very well established and well regarded for the high standard of its products. Both the New Zealand and Australian operations have customer bases comprising well known companies in the industry and, with the demise of the Australian branch’s major competitor, the Australian business has expanded hugely with anticipated profitability for the 2007 year in the region of NZ$952,000.

Current total profits for the business are estimated at $1.5 million with good confirmed customer orders in place. Sales are currently in the region of $9 million and tremendous opportunities exist for growing this business within New Zealand and Australia. New Zealand is the Head Office and handles virtually all of the management, administration and financial activities for both companies. The Australian operation has an excellent team in place maintaining regular contact with its local customers.

The vendors are retiring and are prepared to negotiate a flexible settlement.

Asking price for this business is $2.65 million plus stock at valuation (estimated $1.9 million)

Information provided strictly on appointment.

Click here to learn more.

Handle The Process Correctly
This step involves screening all interested purchasers for your business, having them sign confidentiality agreements, showing them the relevant information about your business, getting offers on your business and negotiating these offers into confirmed sales.

Offer and Acceptance - Agreement
An offer will typically include the price and terms being offered, the sale structure, a settlement date, contingencies and conditions of a sale.

Terms and conditions presented in any offer may outline the method of payment, scope and length of an agreement, training terms, identification and condition of assets being acquired, identification of liabilities to be assumed, any seller warranties, and other transaction details. Contingencies will detail all action items needing completion prior to a sale. Verification of financial information (due diligence); satisfactory equipment inspections; satisfactory lease transfer arrangements; compliance with licensing and regulatory bodies' requirements; financing approval; solicitor review of leases and contracts are all common sale conditions. Contingencies will often be tied to completion dates.

An offer may be accepted, rejected, or modified and presented back to the purchaser as a counter-offer. Until agreement is reached by both parties, either party may withdraw their proposal. In considering an offer, be sure to evaluate the purchaser’s qualifications, financial position, and method of securing any payments to be made. A good price from a risky purchaser may not be the best solution.

Due Diligence
The time between signing of an agreement and finalising a sale can be the trickiest. “Due Diligence” is typically the first item that follows. A purchaser may have his accountant or solicitor assist to perform due diligence. This may include a review to verify the financial and operational information supplied by the seller.

Helpful Hints
Do not allow in depth due diligence to be performed until an agreement has been reached.

Have a clear time frame encompassing the due diligence process. A time frame in which necessary information will be provided, and a time frame in which due diligence will be completed, keeps a transaction moving in a forward motion.

Do not move on to other contingencies involving third parties (lease transfer arrangements, supplier transfer agreements, etc.), until the due diligence contingency has been removed.

Call us at 09 630 1600, toll free on 0800 180 222, visit our website www.abcbusiness.co.nz or email Managing Director Steve Smith (AREINZ) on steves@abcbusiness.co.nz