Peter Watt, director of corporate finance at the mid-tier firm, said the first step in getting a business ready for sale is to identify accurately the product or service being sold, and to put a value on it.
“Further, you need to make sure any intellectual property has been identified and is appropriately protected for the good of the business, and the sale,” he said.
Mr Watt outlined four things he said business owners need to have when selling their business:
1. Assurance that the business is adequately and appropriately resourced to allow an orderly exit;
2. Reliable and accurate financial information;
3. Secure contracts with customers and suppliers; and
4. Systems and processes in place for operating the business.
“While these might seem obvious, and should be the foundation for any successful business, this is not always the case. Bringing the business up to the right level before sale will help ensure the best outcome for you as the seller," he said.
“Once you are confident that this is done, set up a dataroom for potential purchasers to conduct due diligence on the business. Finally, take the time to understand the likely buyers and their willingness and capacity to complete a deal.
“Selling a business is a process that requires careful planning and consideration. It is important to methodically go through the sale process to ensure the best result, rather than making emotional decisions. This can be difficult as business owners are emotionally invested in the outcome. The best advice is take a step back and look at the process objectively,” Mr Watt said.