Who to lean on when selling your business
Selling your business can be harder than it looks, with the final sale price (or if it sells at all) not always guaranteed once you put it on the market. Australia (and the rest of the world) is becoming a more supportive environment for startups, with a growing number of maturing startups expanding overseas and acquiring larger venture capital support. As innovation drives business growth in the future, it can be harder and harder to sell an existing business if it does not stand out as a leader in its field.
This is why it is important to lean on those around you to help drive the sale of your business, while tempering your expectations of achieving the price you thought you would achieve. Some business sales may exceed expectations, but nevertheless, it is important to surround yourself with those who are looking for your best interests to get through the sale process.
1. Your family are an incredibly strong source of support when selling your business. They are there to hear your true misgivings or fears about the sale of your business, especially when so much of your wealth is tied up in the process. Not including your family in the sale of your business risks placing too much responsibility on your shoulders if the sale is drawn out too long.
2. An accredited business broker is a good person to consult as long as they can demonstrate experience in your industry as well as previous sales. When choosing a business broker, you approach this in much the same way you would when interviewing a new employee. Once employed, you want to see results in the form of real interest in your business as well as other aspects characteristic to a great employee: strong communications skills, reliability, transparency.
3. Your accountant may be one of the most important people when selling your business as they can tell you just how the length of the sale will affect your finances, as well as help you through the process of selling (especially in regards to taxation). An interested buyer will need to see that you have transparent and healthy financial records, which is where having an effective accountant comes into play. They can be a key player in communicating the worth of your company to prospective buyers, being a point of contact for the buyer’s own accountant, while also advising you on how to minimise your tax liability during the sale.
4. Business advisors or consultants can be those people who come into your life at key moments in your career. You may have consulted a business advisor before starting your business, when growing it and now you should probably consult them before you plan to sell. They have hopefully been with you along the journey of your business and have experience to tell you whether your business is in the right shape to be sold
5. The devil is in the detail, and the solicitor is the only one who really knows that devil. Formulating a fair, transparent and equally beneficial sale of contract is key to selling your business, which is why you need to lean heavily on your solicitor whether you are buying or selling a business. They are there to identify any faults or ambiguities in a contract, or when representing a seller, ensuring that your interests as the vendor are never sacrificed too far when trying to achieve a price.
6. Just as it can be easy to forget how important family is when selling a business, never forget your employees. In many cases it can be easier and beneficial to everyone to sell a business to an existing employee, while their interests should be prioritised when selling to an outside bidder. The happiness of your employees is key to successfully selling your business as they are effectively what you are selling to the buyer; they are the ideas and the machinery that make up the product being sold. Having employees that are excited for a change in management makes your job in selling the business much easier, while helping you get a higher price.