For many business owners, the sale of their business represents the sale of their last big asset pre-retirement. The business is quite often the main retirement asset for business owners who have failed to make regular superannuation contributions and have instead chosen to reinvest every cent they have back into their business.
The task of maximising the value of the business sale now becomes more important than ever. Planning to sell your business should ideally start up to two years out, particularly if there are important issues that need to be addressed to ensure your business will attract maximum interest from buyers.
For example, you may be working 7 days per week. Regardless of a high profit, many buyers will turn away from your business due to the large commitment required. In this instance you may need to look at employing a manager and sacrificing some profit to ensure you have a more saleable asset.
Premises leases can also be a critical issue to address. Without the security of a long-term agreement in place, many buyers will not be able to borrow the necessary funds. Lenders need long term security in place, or they simply will not lend the money. If your current landlord will not offer a long-term lease perhaps it’s time to move elsewhere.
Likewise, franchise agreements, licence agreements, supply agreements and or distribution agreements also need to be secured well ahead of time. To ensure you maximise your business sale long term planning is essential. For a confidential planning meeting, contact us today.