As a business owner, you are constantly working hard to firstly meet your living expenses and then earn as much money as you can.
With our elderly workforce getting closer to retirement, looking at options to sell or close their businesses is starting to come on the radar.
An exit strategy is important for any business. There are a few things to consider in preparing for sale because in any case, the potential purchaser will want to do due diligence and the transaction itself will be smooth if you respond quickly to any requests for information:
– Are your financials up to date? A potential purchaser will want to review detailed accounts for at least the past three financial years.
– Is the business structured properly for a sale? If not, you may need to do some restructuring. Check things like if assets of the business are held by the correct entity and if there are assets that you do not want to include in the sale, that they are transferred into another entity.
– Are contracts in order? You should firstly have signed copies of contracts such as lease agreements, supply agreements or any other long term agreements that are critical to your business operating. Informal arrangements may need to be put in writing for security in buying into your business from the eyes of the purchaser.
– Is your business subject to any disputes, liabilities or uncertainties that could have an impact post-sale? If any of this is evident, they will need to be sorted out to ensure that the purchase price or the purchaser’s desire are not affected.
