Selling a business can be an exciting journey filled with opportunities for growth and new beginnings. However, it can also be a complex and challenging process, especially for those selling for the first time. The good news is that there are many professionals out there who can help you navigate this process and increase your chances of success.
When it comes to selling your business, the key professionals to work with are your accountant, lawyer, and business broker. These experts can provide invaluable guidance and support throughout the sale process, helping you to achieve the best possible outcome.
The same applies for prospective business buyers, with the possible addition of a finance broker if you need to borrow money to fund your business purchase.
Choosing the right lawyer
Choosing the right lawyer is crucial when selling a business. Look for someone with experience in business sales who can help you navigate the legal complexities of the process. They can assist with drafting the sale agreement (usually this is done by the business seller’s lawyer). A proactive lawyer who communicates effectively with all parties involved can help keep the momentum of the sale going, increasing your chances of success. It's also essential to choose a lawyer who understands your business goals and who you feel comfortable working with.
You can ask for referrals from other business owners who have sold or bought their businesses or even better ask a business broker.
We work with lawyers every day and know who understands the business sales process and communicate proactively with their clients and the other parties involved in the transaction.
Choosing the right accountant
An accountant can also be a valuable partner when selling your business, helping you to prepare your financials and minimise tax liabilities.
An accountant can also assist with helping determine a fair asking price, although we would suggest would also suggest you get a business appraisal from a business broker – as they tend to have more current market information. We often see business owner’s accountants providing overly optimistic price guidance, and business buyer’s accountants using a much more conservative approach.
As with lawyers, it's important to ensure your accountant has recent experience in business sales. Whilst business sellers will generally have an existing accountant, many buyers will be looking for an accountant who can help them not just during the sale but also on an ongoing basis. You can ask for referrals from other business owners or search online for accountants in your area who specialise in small business. It's also best to choose an accountant who understands the industry the business is in.
MMJ Business Sales has worked with some excellent local accountants who have helped their clients by rapidly preparing financial statements or providing additional information for potential buyers. We’ve also experienced business buyer’s accountants who have assisted by projecting financial scenarios that allow the buyer to prepare a comprehensive business plan. This can help with raising finance and make for a smoother handover and first few years operating the business.
In one recent example we were able to sell a South Coast bike shop with substantial assistance from the buyer’s accountant. She was able to reassure their first-time business owner client that the business cashflow would safely support an adequate salary and loan repayments. The new owners have confidently thrived in the business as a result.
Let us know if you need any recommendations for a local accountant who we’ve seen looking after their business clients.
Choosing the right finance broker
Approximately 50% of the business sales MMJ transacts will require the buyer to raise finance to complete the purchase. As a business purchase has more unique elements that a real estate purchase it is important to choose a business broker with experience in business sales.
The finance application process can take up to 3 months, so it is critical to choose a finance broker who communicates actively and works with you to find the most suitable solution. There are many finance options for business buyers beyond the big banks and a good finance broker will know which of these will work for you.
Once again you can ask other business owners, especially ones who have recently purchased a business, for their recommendations. Or even better ask a business broker – we know which finance brokers have consistently achieved results for their clients.
One local finance broker on a recently completed business sale was able to put together a novel package that utilised finance from a group of angel investors. This arrangement enabled the buyer to raise substantially more funds than banks were willing to lend, and she was then able to step into her dream home improvement business.
Working with the right professionals can make all the difference when selling or buying a business in Australia. They can help you navigate the complex legal and financial issues involved in the sale process and increase your chances of success. By choosing the right people for your professional team, you can make informed decisions, protect your interests throughout the sale process, and increase your chances of success.