You will begin preparing for sale well before you put your business on the market.
This could include:
- Making sure you document processes and policies, making it easier for the new buyer to operate the business.
- Ensuring employees have documented job descriptions.
- Obtaining written agreements from suppliers and review contracts to make sure they don’t expire during the sale.
- Selling obsolete or slow moving stock.
- Reviewing plant and equipment and selling anything not required.
- Making sure premises are well presented.
- Reviewing your lease agreement to ensure it doesn’t expire during the sale and includes provision to transfer the lease to a new owner.
- Collecting outstanding debts and paying your creditors.
- Obtaining audited financial statements for at least the previous three financial years.
- Reducing employee leave liabilities by encouraging them to take leave, if possible.
Potential buyers will want to undertake their own due diligence into your business. However, it is a good idea to prepare a buyer’s information pack outlining key information about the business and what is included in the sale.
As a general guide the pack should include:
- confidentiality agreement
- description of your business
- customer or client profile
- industry information including how your business performs against industry benchmarks
- detailed list of business assets and their value – these may include documented procedures and systems, plant and equipment, stock, intellectual property, client list, lease information, employees’ skills and qualifications, key business relationships and contracts.
- testimonials from suppliers and customers
- audited financial statements for at least the previous three financial years
- offer and acceptance form
- contract of sale.