Preparing your business for Sale

As soon as you decide to sell your business, you have some important choices to make. Either you
proceed immediately and put it on the market in its current condition, which means you may have
to make concessions on the price due to unaddressed issues, or you can wait until you’ve made an
effort to improve your business’ attractiveness to prospective buyers.
Saturday, 31 August 2019

2019-08

There are plenty of things you can do to get the most out of the sale of your business. It all depends
on your motivations and objectives, but if you can afford to take the time you should do everything
you can to get it in the best shape possible before you even look for a potential buyer.

Paula Lines, Business Law expert from The Law Shop, says it is best to start preparing for the sale as
soon as you decide you might want to sell your business. She explains that getting your paperwork in
order is the first thing you should look at. Sloppiness in that department, or the lack of clear financial
information and records, can be a real problem when trying to sell a business.

“The one thing no business owner can escape is paperwork, whether you’re thinking about selling or
not. Your financial statements are the key to determining the value of your company. However, in
too many businesses the financials are a hot mess,” she says.

“Make sure that all your records are clear, presentable, and consistent. With this, your chances of a
quick and successful sale will improve considerably,” Paula explains.

You’ll need to make sure the following documents are up to date, and readily available for potential
buyers to review:

  • Lease – including any renewals or rent reviews – and any repair and maintenance issues that you may have raised with your landlord
  • Financial statements for at least the last three years
  • Full list of all chattels being sold including records of any repairs and maintenance
  • Details of any essential suppliers and their terms of trade
  • Details of any active work that might carry over to the new owner

Paula says that it is also essential to get a confidentiality agreement drawn up, to make sure that
potential buyers don’t use your information to start up their own, similar business down the road.
Her Business Law team is happy to help you get that airtight.

“You’ll also want to ensure that anyone looking to buy is likely to be accepted as a suitable tenant by
your landlord, so you don’t waste your valuable time on people that either don’t have the financial
stability or the business experience that the landlord might require,” she says.

If you are planning to sell your business and need expert but no-nonsense legal advice, get in touch
with The Law Shop in either Tauranga or Rotorua as soon as possible. They understand the process
and can help compile all contracts, trademarks, and descriptions of intellectual property held by
your company. They will guide you through the entire process, and make it as easy as can be. Visit
www.thelawshop.co.nz to find out more today.

newsletter