Business Ideas & Updates

Selling a business can be a stressful process if you don’t have the right help. If you don’t prepare your business adequately it can result in a significant financial loss.

When is the best time to prepare your business for Sale

It may come as a surprise, but the best time to prepare a business for sale is from the day the business is established or at the latest 6-12 months before it is sold. This means you should make sure all your records are in order, all hire agreements and leases are maintained, obtain the relevant legal and financial advice, and prepare all the required financial documents before putting the business on the market!

Business planning often plays an important role in the preparation of selling a business. Not only by improving the value of a business but also in taking the time and the necessary steps to address important operational considerations well in advance.

Generally when preparing to sell a business you must stand in the position of a purchaser and consider what is appealing, the profitability of the business and whether there are any loose ends that need to be tied up.

We recommend that to market your business effectively, it is important to invest time and money to target the right purchaser. This means that you should obtain a valuation report of the business and provide copies to prospective purchasers so that they have a clear understanding of how the business operates. However, prior to obtaining such a report, you should attend to the following:

• Ensure that the term of the lease is sufficient for the new purchaser to take on, as this could be an issue if the term of the lease expires prior to the completion of the sale or shortly after. Alternatively if the lease has expired, the sale should be subject to the purchaser negotiating a new lease with the Lessor.

• Sell any excess or redundant stock

• Inform your employees of your intention to sell the business – it may be beneficial for them to take their entitlements prior to the sale. It is also important that the new owner is made aware of key employees that should be retained for the profitability of the business and also to maintain key relationships with existing customers.

• Update the premises of the business and make sure it looks fresh and appealing (selling a business is similar to selling your own home, you need to make it look new and not outdated)

• Ensure your financial records are up to date and in order (to ensure the ease of transfer to the new owner)

• Aim to have your debtors under control

• Ensure that you are up to date with your creditors.

• Ensure all contracts with suppliers are up to date.


If your business provides an exclusive service and prospective purchasers may in fact be competition, Confidentiality Agreements should be prepared prior to disclosure of any information. This will ensure that all information disclosed in the Contract for Sale of Business shall remain confidential and there will be consequences for a breach of confidentiality.

Due Diligence

It is quite common these days that a purchaser will undertake due diligence searches to ensure that the Business is all it’s represented to be. These searches include, but are not limited to, ASIC searches which outline whether the business is registered and the required documents have been lodged with ASIC and the ATO, Bankruptcy Searches and Personal Searches to see whether the vendor is a director and shareholder in other companies. This is an issue where there is a restraint of trade and the vendor is engaged with other companies that may be in breach of the restraint of trade provisions. It may be beneficial that you provide these searches to the purchaser to reassure the purchaser.

Selling your business can be an emotional time as you have invested money and hard work over a period of time. It is important to not sell yourself short by not effectively preparing your business for sale.

Unity Management work closely with legal professionals and partners throughout the business planning process. This article has been supplied by Atkinson Vinden Lawyers who can help reduce the stress associated with selling a business. Please do not hesitate to contact Atkinson Vinden on (02) 9411 4466 to discuss how they can assist you in preparing your business for sale. Or contact Unity Management for further information.