Your Hub


Forgot password?

Register for ANZ Biz Hub

You'll get easy registration for workshops offered in your area.

Find out more

Getting a great price when selling your business print Print

If you’ve decided to sell your business, it’s important to plan in advance so you’ll be ready when the right buyer comes along. A good understanding of the different options for selling your business can help to get the best price possible for all your hard work.

Getting a great price when selling your business

Get into top shape early

Potential buyers want to see a business that’s in great condition, and you should prepare your business well in advance of the sale date. One important area to focus on is improving your net profit. The higher it is, the more you will get, it’s as simple as that.


  • Reduce any unnecessary costs, seek to improve your margins by either increasing your prices or accessing cheaper lower-cost supplies. 
  • Initiate a targeted sales growth campaign to cross-sell to your existing customer base and acquire as many new customers as possible – in a cost effective manner.

To reassure the new buyer, also make sure you:

  • Have accurate financial records – ensure you are able to outline key aspects of business such as pricing, margins, highest value customers etc. The more data you have, the more reassured the potential buyer will be.
  • Lock in key staff members with contracts and confidentiality agreements. You want to make sure they stay when you leave. 
  • Clear old inventory and have an efficient inventory management system. This shows your business operates efficiently.
  • Tighten control over debtors and collect any outstanding accounts – you want them paying on time, or early if possible, to help show that the business’ cash flow is under control.
  • Resolve any legal issues or disputes – a new owner doesn’t want to walk in on any legal problems.
  • Replace or repair faulty fixed assets. Sell obsolete equipment, and consider upgrading any fixed assets. This reassures any new owner that you are still investing in the growth of the business.
  • Document your processes – a potential buyer will want to see clearly defined processes for daily operations.
  • Identify any weaknesses and solve them. For example if a lease is coming up for renewal, negotiate a new term well before it expires.

It’s also a good idea to talk to your most valued customers about any improvements they’d like to see, especially if your business is service-based.

Decide on your objectives

Once you’ve worked your way through the above, there are some questions you need to ask yourself, and be very clear about what the answers are:

  • Do you have to sell by a certain date?
  • What price range will you be satisfied with?
  • Will you still work in your business in some form to help with the transition?

Selling options

There are various options available for selling your business. It’s important to understand them, so you can decide which is the best fit for you and your business. Consider the following:

  • Selling to family – our article on Succession planning made simple will help with this option.
  • Management buy-out – this is where you’ve decided to sell to an existing staff member. This can work well because the transition should go smoothly, and the business continues to function during the process. 
  • Sell to another company – this is the option most likely to result in a good price, and being able to walk away with no ties. It’s also the one that will require the most preparation and work. You may be offered a contract to remain for a short period to help with the transition, but you might also be asked to sign a ‘restraint of trade’ clause.
  • Sell to a private buyer – in this case it’s important to check their credentials. You need to be sure they’re serious. They should be able to provide evidence of their business track record and have the appropriate skills and experience. And if you can, try to find out if they’re scouting you for a competitor.

Get advice from the experts

Talking to your lawyer and accountant is important. Your lawyer will help you protect your intellectual property, and your accountant will guide you through the financial aspects.

You may also consider hiring a broker. They’ll assist with negotiations, and it means you can continue to focus on running your business while they look for buyers.

Make sure you ask all of them if they can spot any weaknesses in your business. You want to address as many problems as you can before you offer your business for sale.

Answer potential buyer concerns

Buyers are looking for low risk with high reward. They want to see good cash flow and solid systems in place. Some of the things they’re likely to ask are:

  • What makes your business unique? 
  • How profitable is the business in good and bad times?
  • What’s been the annual increase in sales?
  • What levels of stock and investment will be needed in the near future?

They’re probably going to want to see at least three years’ worth of financial statements.

Advertising your business

There are some things you should consider before you broadcast that the business is for sale, and don’t rush into advertising it. Make sure you’ve got these bases covered:

  • Staff morale – either keep the sale a secret until it’s sold, or be open about why you’re selling. It’s important to be very clear about the impact it’ll have on them, but you don’t want to lose key staff who may be concerned.
  • Suppliers and lenders – they might tighten up or even withdraw credit if they hear you’re selling. 
  • Reputation – what you don’t want is people thinking there’s a problem and that’s the reason you’re selling.

For these reasons, owners that do advertise their businesses for sale in local or national newspapers or industry journals tend to do so in general rather than specific terms, not giving any contact details, but requiring interested purchasers to respond through a third party (such as an accountant or business broker).

Tools and resources

Rate this article:

  • 12345 Click on the stars to rate

Share this: