5 things you need to do before selling your business
Did you know that the average age of business owners in New Zealand is around 58 years old? Unless they’re going to work until they die (thanks BNZ, great commercial!) this means there’s going to be huge numbers of businesses coming up for sale in the next 10 years or so. If you’re thinking of selling, you’re going to be one of many so make sure you prepare well. These are a few of the things you should be doing before you sell.
1. Seek good advice beforehand
Selling a business successfully can be tricky, stressful and difficult to face on your own so you need to get a good team in support, including a good accountant with the right experience, a great commercial lawyer and possibly an experienced business broker.
Yes, they’ll cost money, but they’ll save you money by protecting your interests and not letting you be bullied or misled by the buyer or their advisers. Unlike you, they are involved in selling businesses regularly!
2. Pick the right time to sell
There are two main factors to take into account: economic (local or national) conditions and the health of your business. Obviously, there’s very little interest in business during recessions. In regards to the health of your business, prospective buyers are interested in the future, not the past, which means your business needs to be in a growth phase or healthy maturity — not a fledgling still in the nest or on the way down. Are your sales increasing or decreasing? How is your gross profit margin tracking? Have you paid lots of tax recently?