Hello Guys How are you? Hope you are fine today in this post will be different. Before selling your Australian business, there are certain steps that need to be taken to prepare the business for sale. This preparation checklist is in your best interests and will maximise the value of the business as well as ensure increased interest from potential buyers for a faster sale.
Here’s Our 5 Selling Your Business Checklist To-Dos
1. Financial Statements
Any potential buyer will first want to see the financial statements of the business in order to evaluate its worth and its current net income. So ensuring that all the books are in order is essential. It is also a good idea to recast your financial statements with a view to maximizing net income rather than minimizing it for tax reasons. This will improve the financial outlook for the business in the future and make the business more attractive to investors and buyers. You should prepare statements and tax returns dating back between 3 and 5 years.
2. Determine Potential Growth
Research and identify potential areas of growth and expansion for the business and create a realistic plan. Buyers will want to see that the business does have the potential for growth and that it hasn’t reached its full potential yet or that it is likely to decline in the coming years. Areas of focus should include those where financial restrictions may have prohibited growth in the past as well as opportunities that may arise in the near future.
3. Strengths And Weaknesses
It is important to evaluate the business objectively and identify strong and weak points. Focus on the strong points when promoting the business and improve on the weak points. This weak point could become deal breakers which means that they could turn potential buyers away without even considering the strengths of the business or the future potential. It is best to address all issues with the business sooner rather than later. This should be done months, if not years before the business is actually put on the market for sale.
4. Identify Current Market Requirements
What are potential buyers looking for in relation to the current market as well as the specific industry in which your business operates? Are they looking to invest in a business or make improvements in order to resell the business for a quick profit? Use these identifying factors to shape the recasting of your financial statements, your growth and expansion plan as well as the way in which you will market the business when it is put up for sale.
5. Independent Valuation
It is also a good idea to have an independent evaluation of the business performed. This valuation will help identify whether it will be worth your while to sell the business and whether this is the right time to sell. It will also help identify areas where there is room for improvement as well as other steps that can be taken to improve the net worth such as the sale of unused or excess assets.
This valuation will also help determine a fair selling price in relation to the current market and the profit or even loss that may result from the immediate sale. It is recommended to have another independent valuation performed once the necessary improvements have been made or a few years down the line should the forecast from the first valuation not have been positive.
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You may also want to prepare yourself personally for life after the sale of your business. How will you spend your time and will the profit from the sale secure your personal financial future? For most business owners, the sale of a business that they have invested their time and money in happens only once in a lifetime. Thanks for visiting our website. and must share this article with everyone.