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Business Seller's Checklist

A Sellers' Checklist

At some stage you may wish to sell your business. There are a number of things you can do to maximise your price and make your business more attractive to potential buyers. By working through the following checklist you will have a more valuable and saleable business to get you the best result.

How is it looking?

  • Get all maintenance up-to-date and ensure your premises are looking good – replace, fix, clean and paint.
  • It’s important to attract and retain buyer interest … what areas would help with this?
  • What’s the profitability like – your financials?
  • Do your accounts reflect a well-run and hopefully profitable business? Are they accurate? Is everything there?
  • Do they include a reasonable salary? Be able to highlight and explain any unusual items etc.
  • Are your accounts up-to-date?
  • Buyers often ask for the last 3 years accounts and will be interested in sales and profits – are these available?

Get cash flow!

  • Get your accounts in order and make sure it’s all going through the books. This will help maximise your businesses’ value (and give an accurate account of profits).
  • Tighten up on all expenses and eliminate any shrinkage.
  • Fine tune the sale processes and close-off all outstanding sales opportunities.
  • Build the value, attend to all off-the-balance sheet items:
  • Tidy your database (if you have one of course)
  • Introduce and document all systems – this makes it easy for someone else to buy and operate the business.
  • Are all licences and recipes etc. in writing?
  • Are all product patents in place?
  • Is all customised software documented and supported?
  • Will you tell staff, and if so, when? Are the key players happy to stay on for the new owner?
  • Are favourable terms in place with suppliers?
  • Build your business – thing big, be big!
  • Push for new business to boost sales leading up to the sale of your business – be active.
  • Promote! Be big, bright and profitable …
  • Sell off obsolete or damaged stock:
  • Stock is usually sold at cost or a margin below cost depending on condition, age etc. Sell dated or surplus stock to ensure that you maximise the value of you business, while minimising the entry price for the purchaser.

Sell off any unused plant:

Realise the value of any surplus plant. This assists in keeping the price down and gives you an opportunity to get a better price for redundant equipment.


Valuing your business:

  • Go with a fair price. Buyers generally look at many businesses and know what to expect – too high and a slow sale will kill the action.
  • Arriving at a reasonable figure is something of an art, with support from statistics of sales of similar businesses sold NZ wide.
  • Consult with and engage a specialist Business Broker to help.

Straighten your records – get organised:

  • Ensure that all leases have been formalised in a way that is acceptable to you and your likely purchaser.
  • All Agency/Sale agreements and/or distribution agreements should also be formalised where possible.
  • Any other house-keeping issues should be attended to.

Fix those problems- no surprises!

  • Have all legal and accounting disputes been resolved? Surprises can kill any deal fast.
  • Have environmental issues been attended to?
  • Even the slightest problem can scare a potential buyer – identify and fix these.

What about your employees?

  • When a business is sold “vulnerable employees’” can elect to stay but they must be offered employment by the purchaser.
  • It is important that you manage this process and treat all employees fairly and reasonably to avoid any potential personal grievance claim – have you a plan?
  •  Look to involve key personnel as they are likely to be important in the transition and contribute to the future success of the business - identify who and what is involved.

Why should I use a broker?

  • A Broker can help in packaging your business. They are knowledgeable about the market and will market your business for sale.
  • Are you objective? It can also be beneficial to use an objective third party who is not attached to the business and who can dedicate time to the sale process. A specialist Business Broker is qualified to do this for you.
  • Your Business Broker qualifies all buyers and has them sign a “Confidentiality and Non Disclosure Agreement” before any information about the business is given out. You may vet the people receiving such information.

Your marketing strategy – have a plan:

  • Your business Broker will help you define your potential buyer: what do they do, their interests and what they read/use etc?
  • With advice from your Broker determine how you may best create interest and reach (market to) these people.
  • Your Broker will qualify your potential buyers.
  • Your Broker will discuss with you the process to best maximise your sale price.

Get your paperwork together:

Provide all material to the Broker for the comprehensive Business Information Memorandum to give prospective buyers, outlining the opportunity. See also the comprehensive list under the “Guide to Vendors” tab on this website.

This includes:

  • A comprehensive list of all assets being sold and the value attached to them
  • A copy of your lease
  • Copies of all permits and licences.
  • Copies of any government or local body requirements/consents.
  • Copies of accounts - preferably for the last 3 financial years.

Things to have

  • A Lawyer who understands business sales for formalising/checking the Sale Agreement and offering legal advice – important!
  • An Accountant, for financial information and advice on how to structure your sale to minimise the tax implications.

Be prepared – anticipate Buyer requests:

  • Plant (asset) lists, valuation and depreciation schedules
  • Customer sales breakdowns.
  • Accounts/ history to aid the buyer get finance.
  • Possible vendor finance & transition assistance?

A buyer’s first impression is critical to selling any business. Help the buyer feel comfortable in buying your business. Be honest and realistic in your meetings with both Brokers and potential buyers. Selling a business can take time!

This Checklist is Copyright © 2012 nzbizbuysell.co.nz and is for you to use. It has been provided by NAI Harcourts Grenadier Business Brokers in conjunction with NZ Business for Sale Online specialists www.nzbizbuysell.co.nz

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