All business owners will eventually ‘exit’ their business, either by selling it, gifting it to a son or daughter or quietly close it down. They sell the business for a variety of reasons:
- It’s time to retire.
- They wish to move to another type of business.
- They’re sick and tired of the hassles of business.
- They are compelled to sell because of a partnership split, divorce, health issue, impending bankruptcy or moving away from the area.
It’s important not to vacillate about your decision to sell. Once you’ve made the decision, you will incur expenses from your accountant, solicitor and business broker. If you change your mind, you’ll have incurred not only these costs and expenses but also a lot of heartache and time.
Selling a business always involves the owner, even when you engage a business broker. You have to provide all the relevant information and allow complete strangers to delve into the intimate details of your ‘baby’. You have to have numerous meetings with prospective buyers and you have to answer a barrage of questions. It can be a simple, smooth-flowing experience or on the other hand, a never-ending grind to the final settlement. If you follow some simple guidelines, you won’t be exasperated at the end of the transaction.
Some businesses sell fast, some take months or even years to sell. What determines the time taken to sell your business involves the following factors:
- The market desirability of your specific business.
- Affordability - the lower the price, the easier to finance.
- Profitability…profit is king!
- The general state of the Australian economy.