Preparing your Business for Sale / Exit

Thursday, December 8, 2011 by Wakeful Partners | No Comments | Taxonomy:

Whether you know it or not in the short or very long term the majority of business owners are developing businesses that they one day hope to sell.

This sale could be to an unrelated party or as part of a succession plan to a family member or next generation.  With this in mind business owners need to begin to understand the motivations and dynamics of prospective purchases and the market when preparing their business for sale.

We outline the key steps for you below;

  • Understand what your business is worth and the components that make up the value.  These include recent profit history and future business risks as well as the strategic position of the buyer.
  • Understand what you are selling (asset or shares in company)
  • Prepare an information memorandum and complete the due diligence process including providing information for purchases (under confidentiality agreements) while minimising disruption to the business.
  • Consider business structure and the tax considerations on the sale.  Tax planning and minimisation strategies on the sale are crucial to achieve the best result.
  • Ensure that you have appropriate advice when negotiating the contract for sale including the structure of the sale and any warranties requested.

Overall a clearly developed exit plan will allow you to complete this process as efficiently as possible.

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