Thinking about selling your business? Here are 3 things to consider before you do!

1. Is selling my business really what I want, or do I just need additional help? 

To answer this, the first question to ask yourself is what is your motivation behind selling? What’s the real cause and reason, is it financial? Is it stress? Perhaps it’s to spend more time with family? Knowing whether you’re looking to sell your business to fix or mask another problem is essential.

If you're wanting to sell your small business because of financial issues, firstly take a deep breath. Next, turn to your trusted accountant for professional advice and set up a meeting to chat through your options. Selling your business is just one option when it comes to handling financial stress.

Talking to a professional will also help you wrap your head around the holistic picture of selling your business which may also include additional obligations to pay, such as employee entitlements or tax amounts from asset sales.

If you’re feeling like retirement is in the cards for you, there may be other succession plan options out there that differ from a straight transaction.

After this, if you decide selling your business is still the right move for you, your family and your business, continue onto our next business owner question but keep in mind… is selling truly what you want?

CHECKLIST QUESTIONS

• Why are you selling? 
• What do you want to get out of selling?
• What are your goals? 
• Are you prepared for any and all outcomes - how will you cope if you don't get your asking price or if the business doesn't sell? 

2. Who should I turn to, to help me sell my business? 

Who’s on your financial team? Do you have a trusted accountant who isn’t just good but great? Do you have a business broker or solicitor?

You want to make sure you can confidently say you trust your financial team to handle the transaction in your best interests and get you the best deal.

CHECKLIST QUESTIONS

• Who's on your financial team? 
• Who will be impacted by the sale? Employees? Management team? Family? 
• Do you understand the sales process and steps required? 

3. What parts of my business am I actually selling?

As you know better than anyone else, businesses are complex. So selling your “business” is actually a process that involves selling one or more of your business assets.

CHECKLIST QUESTIONS

• Do you want to sell the business outright including all the assets? 
• Which assets do you want to keep vs. which are you looking to sell? 
• Do you want to sell your registered business name? 
• Are you looking to sell your business' intellectual property (IP)? If so, which IP in particular? 
• Do you want to include any property the business might own? 
• Have you thought about what will happen to your employees? If acquired, will your employees have the opportunity to transfer across? 

Agreeing on exactly what is being included in the sale of your business is extremely important to the process. It will also help calculate the value of your business and how much you can expect to receive from the transaction.

In Australia, the average time it takes to sell a business is six to nine months, however it can take a lot longer. While there are many reasons a business owner might want to sell their business including retirement, relocating, external circumstances such as poor health, or wanting to try something new, selling the business isn’t always the right option for you. Working through the above questions will help provide clarity if selling is really what you want.

For more information and support, please get in touch with your client director, give us a ring on 1300 932 584 or contact your local Kelly+Partners office.