Covid-19 pandemic has influenced more than financial corporations only in Australia but throughout the world. Most entrepreneurs have hectic times to maintain their dream businesses. Others might have lost their employment or even their small firm with social distancing still in place.
Allan & Co will provide some tips that you need to DO and DO NOT do when selling your business in Australia.
DO PLAN AHEAD
Selling a company is a huge distraction and a big decision. Planning is crucial as it will minimise the unnecessary risks as well as look for potential buyers. Furthermore, maintaining the day-to-day business operation needs to pay attention because sale price might suffer badly (even your chances of selling) when your trading performance stutters.
DO PREPARE PROPERLY
Adequate preparation is likely to increase value. You should look into:
- Profit and loss statements for the past 24 to 36 months
- Current balance sheet
- Any financial forecasts and business plans
- Any bank loans or line of credit loans
- Details of your business' financial systems and processes
- A detailed breakdown of the outgoing costs
It's wise of you to work with an experienced accountant who can help you with this quickly and properly
DO CHOOSE THE RIGHT REPRESENTATIVE
As much as you're selling your physical business, there's also a motional element at play, and letting go can be a difficult process. Having a neutral third party can help mitigate that and ensure the process starts on point and stays on track.
DON'T SKIMP ON LEGAL ADVICE
The sale process of a business enormously complicates. There are numerous legal implications while selling a business, both from a compliance and financial perspective. A prestigious commercial lawyer can always give you useful pieces of advice, not only help you get the best price but also avoid unnecessary costs once the deal is done.
DON'T RUSH DUE DILIGENCE
Diligence is a valuable and necessary process for both buyer and seller. While the potential purchasers have a chance of digging a little deeper and understanding your business and the opportunity, more importantly, you could check the potential buyers and scope out if they are the right opportunity before carrying out a contract.
Ask your lawyer and your accountant to help you with this.
Ask your lawyer and your accountant to help you with this.
DON'T SELL TO WRONG BUYERS
Don't rush with any offers. When you're selling your business, always have a lawyer and an account evaluate all the risks and rewards you have with the offer you are considering.
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Should you have any questions, please do not hesitate to contact us for accounting, financial or tax advice and services.
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Phone: (02) 9709 5070