Selling Your Business
You need to think like a buyer, what would you want when purchasing a business? Be prepared with information before you are asked and give your broker information in advance so he/she can manage the buyers
- You need a solicitor, if you don’t have one then get one
- You need a contract of sale, your solicitor will prepare one when you are ready to proceed to this stage
- A copy of the current lease, if you don’t have one obtain one from your landlord
- If you are a franchisee you need a copy of the franchise agreement. If you don’t have an agreement, then obtain one from your franchisor
- You need your business financial reports, including Profit and Loss and BAS reports.
2. Meeting a buyer
The SBX broker will notify you when a prospective purchaser wants to inspect your business. Find time to meet and reply to confirm the appointment. Be ready to answer questions about the business and conduct a detailed inspection
3. Due diligence
As guided by your broker, provide the buyer with additional information requested and assist the buyer to complete their due diligence analysis.
4. Receiving an offer
The buyer will send your broker an offer which will then be forwarded on to you. Conditions may include:
- Contract is subject to assignment or transfer of lease. The owner will introduce the buyer to the landlord and facilitate assignment/transfer.
- For a franchise, contract is subject to approval of franchisor. The owner will introduce the buyer to the franchisor and facilitate assignment/transfer.
- The owner will provide buyer administrative training of 1-2 weeks before settlement, and assistance of an agreed period of time after settlement.
- The owner will introduce the buyer to suppliers and facilitate agreements and equivalent terms.
- The owner will pay out any staff entitlements, so staff are unencumbered and able to accept employment offers of the buyer.
- The owner is prohibited from operating a competing business within an agreed restraint distance and period.
When you accept an offer, your SBX broker formally notifies your solicitor and the buyer’s solicitors of the sale. The deposit is due then and payable by exchange.
You finalise the contract with the advice of your solicitor, then the both parties sign and exchange contracts.
7. Satisfying conditions
If revenue is being verified through a trial, the daily revenue is recorded and tallied for the week(s). If accepted, the condition is satisfied. The buyer applies to the landlord to assign/transfer the lease. If approved, the condition is satisfied. For a franchisee, the buyer applies to the franchisor. If approved, the condition is satisfied.
8. Handover + Settlement
At settlement the buyer pays the balance of the Sales Price and Stock at Valuation. You transfer business ownership to the purchaser. You introduce the buyer to suppliers and key customers and provide the buyer training in the operation and administration of the business. SBX releases the balance of deposit less commission.