The selling process

After many years of hard work and most likely plenty of sacrifices, the decision to exit or sell your business can be both exciting and stressful. It does, however, represent a one-off opportunity to reap the rewards of all your hard work and you need to ensure you have the right team behind you.   

Hiring a broker to assist in the sale of a business is very common.  One of the key reasons why business owners seek the help of a broker is because it allows you to focus on what you do best – running your business.  

There are a number of steps to listing and selling your business and obtaining the maximum realisable value for it, as follows:

Prepare for Sale of the Business

Prepare for the sale as early as possible, preferably a year or two ahead of time.
You should be aiming to ensure your financial records are an accurate reflection of revenues, business expenses and assets/liability levels, the business is clean and in good repair, and excess equipment or furniture which is not part of the sale is removed to make the business more saleable.  These improvements will also ease the transition for the purchaser and keep the business running smoothly.

You should be aiming to build a steady sustainable revenue stream with growth rather than one that is erratic and unpredictable.  Annual reviews should also be undertaken to reduce or eliminate discretionary expenses – the effect on your net profit when you reduce your costs by only 2% can be substantial.  For example, a $25,000 increase in your bottom line may add $100,000 to your selling price based on using an EBIT multiple to determine the value of your business. All expenses should be reviewed on an annual basis ideally by a third independent party to ensure that there is little wastage.  There are numerous other issues to consider when preparing for the sale of your business, such as securing your market share, systemising your processes so the business is not vendor reliant, diversifying customer and supplier concentration, putting in place business projections/targets to achieve to maximise cash flows and obtaining advice in respect of the tax implications of the sale.

Business Brokers can help you analyse your business to identify sources of value and areas of your business that can be improved so that you achieve the maximum value when you sell it.  

Gather and examine company historical and financial data

Business Brokers will usually gather 3 to 5 years financial information (if available) which will be analysed as it provides a prospective purchaser with vital information about the business’s performance, its strengths and weaknesses and – more importantly – pointers to its prospects.  Financial information that we usually obtain to review to better understand your business includes:

  • Income Statements
  • Balance Sheets
  • Tax Returns
  • Equipment List and Appraisals
  • Property/Building Appraisals

Market Appraisal

Business Brokers goes beyond the business’s financials and provides a realistic ‘Market Appraisal’ to the vendor giving them an opinion as to the approximate value of the business.  A Market Appraisal will assist you with making an informed decision as to whether selling is indeed a viable option for you at this time and helps ensure that you price your business at a realistic selling price and for full value.  If you list your business for sale with Business Brokers, we will provide a market appraisal of your business included complimentary in our listing fees.  

Be wary of business brokers that quote you a market price which is greatly exaggerated to impress the vendor so as to win their business.  If you are serious about selling your business, then please contact us to ensure that your business is an attractive proposition to potential purchasers – we can review your business processes and help minimise or eliminate any factors that may deter investors as well as provide you with an accurate market appraisal in the current economic climate.

Set a realistic price

Setting a realistic asking price is probably one of the most important steps in the selling process. Naturally, you want to get the best possible price for your business, but you should understand that the price is determined by the current marketplace.  

The price should be set high enough to allow you room to negotiate, but not so high as to frighten off prospective purchasers.  However, at all costs, you want to avoid the risk of under selling your business.  

Business Sale Authority

Once you have reviewed and agreed with the estimated realistic selling price and signed and returned the Business Sale Authority to us confirming that you wish to proceed with our engagement to act as the vendor’s agent in selling your business we will then commence the considerable amount of work required to sell your business.

Preparation of Advertisement, Profile and Information Memorandum

After we have been appointed and have agreed a realistic asking price for your business, we will then compile the Advertisement, Profile and Information Memorandum in respect of your business to present the business in the best possible light.  It is important to understand your business well and know the right features to highlight as different purchasers may react negatively or positively to certain aspects of a business. The way the business is presented needs to reach all prospective purchasers and our consultants are well skilled in doing this.

We also believe that it is critical to have genuine, professional marketing presentations of your business to achieve and attract serious prospective purchasers to the table.  Many business broking firms only advertise your business and do not prepare the important secondary documentation, such as the Profile and Information Memorandum which are the critical documents used to generate genuine interest from prospective purchasers.

Reliable marketing and advertising

We then develop a marketing strategy and determine the most likely source of purchasers for your business – which often includes our own extensive proprietary database of prospective purchasers, identifying prospects through the internet, direct mail to selective industry lists, advertising on 6 well known public websites, and tapping into local, national or overseas networks of our associates.  

Qualify purchasers

After handling all enquiries from the various sources, the prospective purchasers must be qualified.  We eliminate time-wasters, hopefuls with no money, and inquisitive competitors.  If interest is shown by a genuine purchaser, financials and other information will be disclosed to them after a Confidentiality Deed is first signed.  Once we are confident of the viability of a prospective purchaser, we will meet personally with them to do further due diligence investigations and also arrange an inspection of the business.

Maintain confidentiality

For most businesses, confidentiality is a critical factor in a successful sale.  Like most business owners, you may not want your staff, suppliers, bankers, customers or competitors to know you’re selling.  At Business Brokers we strive to great lengths to protect the confidentiality of the sale of your business (unless you instruct us otherwise) by using nonspecific terms in advertising, screening prospective purchasers, and asking all parties involved to sign Confidentiality Deeds.  We also phase the release of business information to match the growing evidence of the purchaser’s sincerity and trustworthiness.

Negotiating the commercial terms

One of the most important and difficult parts of selling your business will be the actual negotiation of the commercial terms of the sale.  From negotiating the price and other commercial terms to structuring the terms of the sale, financing, training or creating the best approach to minimize tax – there are a lot of commercial considerations to be addressed.  Ultimately, a win‐win deal is often the best way to sell your business thus making it important to understand your unique needs and objectives, as well as those of the prospective purchaser.  It’s also very important that all negotiations are handled exclusively by our Business Consultants in order to ensure the greatest likelihood of a successful sale eventuating and generating competitive tension between interested parties.


We prepare a commercial analysis of the terms and conditions as presented by prospective purchasers which is used for preparing and evaluating counter-offers.  Small changes in terms, conditions, rates and other considerations may make a significant difference in the viability of an offer.  When an offer is received in writing and accepted by the vendor, a deposit is then sought from the purchaser. 

We are available to draft Heads of Agreement which set out the commercial terms as agreed and act as stakeholder during the sale process.  We can also provide you with a panel of lawyers who are well versed in drafting Contracts of Sale or Purchase in respect of a sale of a business.

Close the transaction

We manage the closing of the transaction until settlement by assisting and staying in contact with the lawyers, accountants, financial and business advisors of the vendor and prospective purchaser so as to efficiently and smoothly close the deal.  

Our involvement until closing is critical to a successful sale completing as we rely on proven processes and seasoned expertise in doing so.  This often sets us apart from many other brokerage firms as we have in house lawyers, accountants and members of the Financial Securities Institute of Australia whose skills and expertise our team draws from.

Our business is proudly connected with the following peak industry associations by way of individual memberships: