Steps to selling your business

There are a variety of valuation techniques used to value a business, for example discounted cash flow [NPV], asset and market based valuations.

The pocket price is the final cash you can put in your pocket after all the transactions costs are accounted for. Transactions costs might include:

1. Legal Fees: Solicitors will be required to prepare the contract of sale.
2. Accounting Fees: Additional fees maybe required for the preparation of financial and/or tax reports that will form part of the Offering Memorandum.
3. Valuation Charges: Stock or plant valuation maybe necessary.
4. Lease Transfer Fees: If as part of the business there is a transfer of lease for plant and equipment a re-assignment fees maybe incurred.
5. Payable Accounts: All payables incurred by the business and unpaid on the date of the settlement are generally paid out by you or your company.
6. Tax Liabilities: All tax liabilities incurred by the business and unpaid on the date of the settlement will have to be paid.
7. Workers Entitlements: All workers entailments such as unpaid leave, long service leave etc. are normally paid on the date of settlement.
8. Brokerage and other Adviser fees: Fees paid to advisors and your business broker for preparing and selling the business on your behalf will need to be
   finalised.

Where appropriate it maybe prudent to undertake are a pre-sale grooming program. The objective of these
programs is not just to make cosmetic changes but to prepare your business so prospective buyers can see the real potential and be willing to pay a higher
price. Good presale grooming programs are underpinned by three [3] key initiatives:

1. Improving operating transparency
2. Improving financial transparency
3. Eliminating/minimising the reasons for buyers to discount their offer

Not every buyer is capable of exploiting the full potential of your business – so it´s critical to understand those that can and why. With this knowledge its easier to develop very targeted marketing campaigns to attract those buyers who we know will be willing to pay the right price.

One of the best ways to secure a high price is to work out how a buyer will gain maximum value from their acquisition. The less risk a buyer sees, the lower the discount rate they are likely to apply when they make an offer. Thus a business that appears well managed, has good internal systems and procedures is going to present much less risk to buyers. It´s also important to understand that buyers don't want YOUR business -- they want a business they can make their own. The numbers will not sell your business but the opportunities the business represents will!

We can help prepare and package your business so information is transparent to buyers and they in turn will be willing to bid a higher price a result.

Sometimes it more about presenting what a business hasn´t done than explaining it past achievements. Buyers don’t want somebody else’s business, they want a business they can make their own. The advertising and marketing campaigned campaign should be aimed at developing a communication strategy that helps prospective buyers discover the upside of a business for themselves . . . and letting them keep it as their own little secret.

We estimate 30 – 40% of transactions fall over during this stage so it’s critical the due diligence, settlement and transfer stages of the transaction are managed properly. This means coordinating all the solicitors, accountants and advisors so they fully understand what is required.