Preparing Your Business for Sale | ABC Business

Preparing Your Business for Sale

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The following is a summary of an article written in the USA by a business broker, Brian Mazar, and it certainly holds true in NZ.

Most business owners are so busy running the day to day operations of their business that they do not give ample time to the future sale of their business. Before selling a business there are many factors to consider and good preparation will maximise the return to the business owner.

The best time to sell your business is when it is performing well, and when the future projections look even better. If the economy is performing well and there is general optimism this will certainly assist.

Regardless of the state of the economy there are certain things owner can do to make their business as attractive as possible to prospective purchasers.

Here are some useful tips to add value to your business when you are preparing to sell:

  • Spruce up the physical appearance of your business and the assets. First impressions count!
  • Have accurate, up to date, and verifiable trading accounts for the last two to three years.
  • Reduce the reliance, if possible, on one or two large customers to spread your risk.
  • Write an operations manual, and standardise the procedures.
  • Investigate the transferability of the lease and any key supplier agreements in place.
  • If possible, re-negotiate any key supplier agreements on more favourable terms.
  • Ensure the plant and equipment key assets are well maintained and operating well.
  • Identify the key staff and incentivise them.
  • Take steps to eliminate any non-performing or unnecessary staff.
  • If the business carries a stock inventory, take steps to reduce any unnecessary or obsolete stock.

Careful planning will generate the business owner the most value and expedite the sale. Working with an experienced business broker will also add value and most importantly protect the confidentiality of the business owner during the sale process.

The team at ABC Business Sales are willing and able to invest time to assist business owners, without obligation, when they are considering the sale of their business.

By Scott Laurence

Business Broker
p. 07 390 0095
m. 027 473 5425
e. scottl@abcbusiness.co.nz



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