Be proactive and plan early. That’s the advice from accounting firm, Optima Partners when preparing to sell your business.
Selling a business is a significant undertaking that requires careful planning, strategic thinking and attention to detail. Whether you're considering retirement, pursuing new opportunities, or simply looking to capitalise on your hard work, preparing your business for sale is a crucial step in maximising its value and ensuring a smooth transition.
“Be proactive and plan early,” says Ross Stagno, Optima Partners Director.
“Ensure your financial compliance is in order, you have systems in place and correct any potential risks prior to engaging with brokers or potential buyers.”
Stagno and Co-Director Phil Carulli presented at the CCIWA-Optima Partners event, Preparing your business for sale, held on November 13 at CCIWA’s Perth office.
More than 75 people attended the event.
The importance of financial preparation
Optima Partners Director Ross Stagno
One of the first steps in preparing your business for sale is to ensure your financials are in order. Potential buyers will scrutinise your financial statements, so it's essential to have accurate and up-to-date records. Consider working with a professional accountant to address any discrepancies, clean up your books and provide a clear financial picture for potential buyers.
This transparency not only builds trust but also enhances the perceived value of your business, says Stagno.
“Manage your expectations: businesses can be difficult to sell and generally the seller’s expectation of price does not align with the market,” he says.
“Understand for the buyer there is significant risk with purchasing a business or company.”
What is succession planning?
Succession planning is a key aspect of preparing for a sale, Stagno says.
The most common ways to sell a business are an internal buyout, employee share schemes or an approach from a competitor or external party.
Whichever way, it may take longer than you anticipate, Stagno says.
“If you're going to sell your business, you might embark on that journey with the best intention to maybe sell inside three months, but it's probably going to take a year because you've got lots of different people that are going to be involved in that process between professional advisors on the buyer’s and seller’s side,” he says.
“You're going to have accountants and lawyers and potentially have valuers looking at different aspects of the balance sheet. And these things take time as everybody has got other things that they're looking at, especially the business owner themselves, as they're generally going to try and present due diligence information at night when they're not running the business, because you have to continue running the business while you are preparing to sell it.”
A professional advisory team is a must
Optima Partners Director Phil Carulli
It is important to assemble a team of professionals, including a business broker, accountant and lawyer who specialise in business sales. Their expertise can be invaluable in navigating the complexities of the sale process, ensuring that all legal and financial aspects are addressed, and maximising the value of your business.
“Form a strong team around you that will assist with the transaction,” Carulli says.
“This applies to both buyers and sellers. Sellers should have all the information required for the due diligence in order and the buyer should have a team that can assist with the due diligence process – lawyers, accountants and IT consultants would be a starting point.”
For more information on how Optima Partners’ services can help your business, or to book a one-hour free consultation, contact the team at [email protected] or find out more here.
