If you're a small business owner in New Zealand looking to sell your business, there are a number of steps you need to take to ensure a successful transaction. Selling a business can be complex, but with careful planning and the right advice, you can achieve a successful sale where everyone walks away happy.
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Step 1: Valuation
Step 2: Documentation
Step 3: Find a Business Broker
Step 4: Marketing
Step 5: Identify Potential Buyers
Step 6: Legal
Step 7: Negotiation
Step 8: Transfer Ownership
Step 9: Finalise
FAQs
Step 1: Valuation
The first step in selling your business is to get a professional valuation from a Business Valuation company. This will help you determine the true worth of your business and ensure that you set a realistic asking price. To make sure you maximise the value of your business sell any assets you don’t need, ensure any remaining assets are well maintained, and ensure that any intellectual property (IP) owned by your business has been safeguarded and officially registered.
Step 2: Documentation
Gather all necessary documentation, including financial statements, tax returns, lease agreements, and any legal contracts related to the business. Make sure all documentation is up to date and compliant with New Zealand accounting standards. This will help build buyer confidence and ensure a smoother transaction.
Step 3: Find a Business Broker
Consider hiring a licensed business broker who is qualified to assist with the sale process. A broker can help you with marketing, negotiating, and preparing the necessary paperwork.
Step 4: Marketing
Develop a marketing strategy to attract potential buyers. This may include advertising in industry publications, listing your business on online marketplaces, and reaching out to your personal and professional network. Ensure that your marketing materials include the keyword "sell business" to improve your search engine rankings.
Step 5: Identify Potential Buyers
Screen potential buyers to ensure they are serious about purchasing the business and have the financial resources to do so. Use keywords such as "buy business" and "invest in business" in your marketing materials to help attract potential buyers.
Step 6: Legal
Work with a lawyer to draft a purchase agreement that outlines the terms of the sale. Ensure that the agreement is legally compliant and that all necessary disclosures are made.
TIP: Include the transfer of any contracts with suppliers like your EFTPOS provider in your sales and purchase agreement. This can help you avoid cancellation fees with suppliers. Learn more about transferring your EFTPOS contract here
Step 7: Negotiation
Negotiate the terms of the sale with the buyer. This may include price, payment terms, and the transfer of any assets or liabilities.
Step 8: Transfer Ownership
Work with the buyer to transfer ownership of the business and any related assets, including transferring any necessary licenses or permits. Your lawyer can help you ensure that all transfers are made in accordance with New Zealand law.
TIP: We make it super easy to arrange transfer of your EFTPOS solution to the new owner of your business. Fill in our Business Change of Ownership form and we’ll take care of the rest!
Step 9: Finalise
Once the sale is complete, close out any remaining financial or legal obligations related to the business.
FAQs
What is my business worth?
To determine the value of your business, you can get a professional valuation from a qualified valuer or business broker. They will evaluate the financial performance of your business, industry trends, and other factors to determine an estimated value.
How long does it take to sell a business?
The time it takes to sell a business can vary depending on several factors such as the type of business, its size, and market demand. Generally, the process can take anywhere from several months to a year or more.
What are the best ways to market my business?
Marketing your business can involve various strategies such as advertising in industry publications, listing your business on online marketplaces including realestate.co.nz, NZ BizBuySell or Trade Me, reaching out to your personal and professional network, and hiring a business broker. A professional business broker can advise on the most effective marketing strategies for your specific business.
Should I hire a business broker or sell it myself?
Hiring a business broker can provide you with valuable expertise and support throughout the sales process. They can help you determine the value of your business, develop marketing strategies, screen potential buyers, and negotiate the terms of the sale. However, if you have experience in selling a business, you may choose to sell it yourself.
What is the due diligence process and what documents do I need to provide?
The due diligence process involves a thorough investigation of your business by the buyer to ensure that all aspects of the business are as represented. This can include examining financial statements, legal contracts, and other documents related to the business. You will need to provide all relevant documents that support the financial and legal health of your business.
How do I find qualified buyers?
Marketing your business to a wide audience is key to finding qualified buyers. Business brokers can help screen potential buyers and find the right match for your business. You can also reach out to industry associations or other businesses in your field to help find potential buyers.
What happens to my employees during and after the sale?
During the sales process, it's important to keep your employees informed about the sale and any potential changes. After the sale, the new owner will have the option to keep your employees or make changes as necessary.
TIP: Resolve any employee issues you might have before you list your business for sale. Learn more about resolving issues with staff here.
What are the tax implications of selling my business?
Selling a business in New Zealand can come with various tax implications and obligations, depending on the business structure. While there is no capital gains tax on profits from selling a business, other taxes may apply. Seeking advice from a professional advisor is recommended. For sole traders, selling assets may trigger a GST liability if both the buyer and seller are GST registered. It is advisable to consult with an accountant about GST and income tax obligations before selling assets.
How can I ensure confidentiality during the sales process?
Maintaining confidentiality is important during the sales process to protect the value of your business. Business brokers can help ensure confidentiality by screening potential buyers and requiring them to sign a confidentiality agreement.
How do I negotiate the terms of the sale?
Negotiating the terms of the sale can involve several factors such as the sale price, payment terms, and transfer of assets or liabilities. A business broker or qualified lawyer can help guide you through the negotiation process and ensure that the terms of the sale are legally compliant.
In conclusion, selling a business in New Zealand requires careful planning and preparation. By following these steps and seeking the advice of professionals, you can achieve a successful sale and move on to your next venture. Don't hesitate to reach out to business brokers, lawyers, and accountants who can help you through the process.
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