This article was originally created for Hayes Knight (now Nexia Auckland).
Home > Updates > Maximising the sale price of your business
There are a few important things to consider if you want to maximise the sale price of your business.
You want to make it as easy as possible for a potential purchaser to walk in and take over. Documenting processes and ensuring that there is as little knowledge “just in your head” as possible will give a potential purchaser confidence that the business will continue successfully after your departure.
Too many people take their eyes off the ball and it is not until the performance of the business is declining when the decision to sell is made. People usually pay a multiple of the profit that the business makes – therefore, ensure that the business is making as much profit as possible in the years leading up to your ideal exit date.
It pays to ensure that where possible, contracts are in place with key customers. The longer the contracts, the more confidence and security an incoming owner will have that the business will continue running as usual for as long as possible.
Often the best people to continue the business may be right under your nose. Key staff members generally have extensive knowledge of the business and are often already devoted to its performance. These employees could be the perfect people to continue the business in your absence. It may even be an option to sell a portion of your business to a senior employee and reduce your involvement in the short term.
These are just a few areas that are worth considering when contemplating selling a business. If you would like more detail or to create a more structured plan feel free to give me a call.
Rod Brown Manager – Business Services +64 9 448 3258 email@example.com