I recently was involved with a client on the valuation of a business. This opportunity came about suddenly from a competitor due to personal circumstances. Two things were highlighted:
- The business was not ready for sale
- The owner overvalued the business
Now more than ever, business owners should be ready to sell as buyers seek opportunities due to the current market conditions. Business owners should ensure the following:
- Up-to-date financial records
- No outstanding tax issues
- Proper documented systems and processes
- Legal agreements such as leases and employment agreements are up to date and in place
Good business hygiene not only increases the business’s value but may also assist in achieving quicker sales. A rule of thumb is to prepare your business for sale two years before you want it to happen. Also, a business owner should consider the sale’s tax implications and budget accordingly.
The above also helps business owners understand any shortcomings of their business and take immediate action to resolve them, so they are ready when the time comes to sell.
If you are thinking of buying or selling a business or want an indicative value of your business, please contact Mark or the team at email@example.com or 9923 2959.
“This is general advice only and not to be interpreted as individual advice specific to your situation. Contact us to discuss the best solutions for your needs.”