Selling a Business
If you are thinking of selling your business, it is important to get the right advice prior to going to the market. A business sale is not generally a straight forward transaction with many things to be taken into consideration.
At McCabe Weston Accountants our team has the experience to ensure you are fully informed when selling your business. Some of the things to be considered are as follows:
- It can be very difficult to determine how much your business should sell for? Businesses are unique and need to be valued for sale on their own merits. Business sales are often subject to the purchaser undertaking a review of the business accounts. It is important to an eventual sale that your sale price can be substantiated using accepted business valuation principles.
- How much will you get for your business after tax? Capital Gains Tax (CGT) is a major consideration in any business sale. It is important that your business sale be reviewed to determine if you need to pay CGT and whether any CGT concessions or exemptions may apply.
- Goods & Services Tax on the business sale must be considered. A business sale will most often be GST Free; however, criterion must be met to get the GST concession. It can be very costly to get this wrong with the possibility of 10% of your sale proceeds being payable to the ATO for an error.
- Who are the potential purchases of your business? How do you best target these purchases? Is the sale something that you can do yourself or should you engage a business broker?
- Are there persons employed within your business who may be potential purchases? Sales to persons internal to your business can in many instances lead to the best results.
- Do you need all the sale funds straight away or would you consider partly financing the purchaser via a vendor financing arrangement? Vendor financing can increase the number of potential purchasers of your business. Vendor financing can also provide you with a good interest return on your money. Interest rates can be negotiated which are substantially higher than rates being offered by banks.
- Is it best to sell your business now or should you wait a while? Are there things you can do in the short term that can make your business more attractive to purchasers and help you get a better price?
- Is your business sale plan more of a long-term objective? Is their potential to sell your business to staff in small proportions over time?
- Do your own the premises your business occupies? Do you wish to retain that premises and lease it back to the new business owners? Where business assets are to be split it can impact the availability of various tax concessions. It is important that advice is sort to ensure the optimum outcome is achieved.
As above all businesses are unique, and it is important that your business sale is appropriately planned so that you get the best result.
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