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.