If retirement is looming large or perhaps you are considering your options after a year of disruption and uncertainty, and may be thinking of selling your business. It’s important to know, that businesses that are well prepared for sale, sell faster and usually at a higher price, than those that are less prepared.
Impatience and the desire to exit your business as quickly as possible often means poor preparation, resulting in a long and laborious sale process or no sale at all. The key is to put emotions aside and properly prepare your business for sale.
Your goal should be to present a compelling opportunity for a new owner.
This will include insights for future profit and growth while at the same time demonstrating there are no major problems that could cause unexpected expenses or setbacks.
While there is much that you can do yourself to prepare your business for sale, you will need professional advice and guidance.
Your sale preparation process should commence with a thorough review that will identify where you are now and how much you could expect to sell your business for as is. This will include analysing your financials and this is only possible if your financial data is up to date and accurate.
Your financial reporting will identify trends – positive and negative. Reviewing your financial information is a business fundamental that becomes even more important when preparing your business for sale. These reports can provide insights that can guide and prioritise your actions regarding missed opportunities that can influence business growth, increase revenue and improve profitability.
Other matters that commonly need addressing include inefficient workflows; higher than necessary wage costs; poor purchasing practices that result in paying too much for stock or keeping too much on hand; incorrectly priced products and services; and administrative basics including failing to collect money that’s owed.
Many older businesses suffer from ageing systems which can be further hampered by employees who invent work-arounds that mask problems rather than overcome them.
These often create extra (and at times significant) costs, poor productivity, staff issues and can negatively impact safety standards. Solutions will likely include upgrading technology, re-training staff, increasing your marketing activities to attract new customers to generate additional sales revenue.
As your accountants and business advisors, we can provide the advice and insight you’ll need for planning and preparing your business for sale. We can assist you to identify:
– inefficiencies and unnecessary costs
– opportunities for increasing revenue
– Capital Gains Tax and personal tax implications to consider when the business sells, and
– selecting the most appropriate sale transaction method for maximising the sale price.
Whether your goal is the sell your business as quickly as possible or at a later date, preparing your business for sale provides immediate benefits that can include a better and more profitable business that contributes directly to the personal prosperity of the current business owner, while establishing a basis for maximising your future sale price.
For more information about preparing your business please contact Rosenfeld Kant on (02) 9375 1200 or email gary@roskant.com.au, raul@roskant.com.au or elias@roskant.com.au
Partnering with you to deliver efficiencies, growth and success for your business.
The information (including taxation) contained within this article is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Rosenfeld Kant strongly suggest that no person should act specifically on the basis of the information in this document but should obtain appropriate professional advice based on their own personal circumstances.