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Frequently Asked Questions

Is my business saleable?

In our experience, nearly all businesses are saleable if they are priced correctly and are presented to enough people in the right sectors. Even if the business makes a loss.

It is highly recommended that you have a thorough market appraisal and valuation prior to attempting to put a business on the market. It can help highlight areas which, if left unchecked, could cost you thousands of dollars, cause unnecessary delays or even stall a sale.

How do you value a business?

Valuing/ appraising a private business is not an exact science. To do it accurately and consistently requires experience, industry knowledge and the ability to analyze and closely examine all the factors involved.

Value can be determined by many factors including growth potential, cash flow, potential economies of scale, sector trends and activity, sustainable profit, asset value, financial history, location, competition, customer base, ongoing management, desirability and the economy.

Multiple of earnings – mainly used for businesses with a record of sustainable profits

Discounted cashflow – mainly used for large cash-producing businesses.

Asset value – used for businesses with a large tangible asset base such as property or plant.

Entry cost method – comparing the entry cost alongside the value of the business.

Industry precedent – some industries have their own unique valuation methods based on sector criteria.

How long does it take to sell a business?

It depends on the market conditions and what is for sale. Our typical business sale takes between 1 to eight months from start to finish. You should allow a full year. In most cases, we are talking to the eventual purchaser within the first six to eight weeks. Buyers need the time to conduct their own due diligence and it’s a delicate process which cannot be rushed as a lot of the time big money is involved and they need to get it right.

What is an executive summary or teaser document?

This is usually a short, one page, document which describes what your business is and the opportunity it represents. A broker will put this together, and it should give enough information to create interest while being anonymous and confidential.

What is an NDA?

An NDA, or non-disclosure agreement (often referred to as a confidentiality agreement) is a document given to an interested party to sign before the release or disclosure of any information about your business or sale. An NDA authorizes and restricts the use of information solely for the consideration of acquiring the business. It allows the flow of information to an acquirer and their advisers. NDAs are typically legally binding but can be very difficult to enforce.

We have a proven and very thorough vetting and NDA process to protect who sees your information and what information they can access.

No commercially sensitive information gets given to any party without strict adherence to our proven vetting and NDA process and only with your express authority. Simply put, you decide who has access to your information.

What is an IM?

An IM or Information Memorandum is a working document provided to potential acquirers once vetted an NDA is signed. The IM describes the business and operations and often includes limited financial information. Care must be taken to get the balance right between disclosure of information and protecting sensitive details. It should not contain employee or customer names for example.

Typical information included is a brief history, industry background, current operations, property and locations, employee numbers/key staff, financial summary, SWOT analysis, current trading and opportunities for growth.

It is important to get this document right as it is one of the main selling tools used to elicit interest. Also, any information provided must be accurate and not lead to misdescription.

How do you keep my business sale confidential?

We go to great lengths to safeguard the confidentiality of our clients. We have a tried-and-tested process of maintaining confidentiality. We vet and pre-qualify all our purchasers making them sign confidentiality undertakings / non-disclosure agreements. No sensitive details of any business are ever given to potential purchasers without a client’s consent.

I tried to sell my business before and nothing happened. Can you help?

This is a very common problem. The chances are there is a very good reason your business hasn’t sold. Once we have identified and rectified this, we can help sell the business for you.

Why are you selling your business?

It is important to have a credible reason for a sale, one that a purchaser can understand and feel at ease with. It also helps structure the most advantageous transaction. Reasons for a sale can include:

  • Retirement
  • Illness/Health
  • Trading difficulties
  • An unsolicited approach
  • Matrimonial settlement
  • Director/Partner disagreement
  • Change of direction
  • Advantageous tax circumstances
  • Other business interests
  • Business has grown above management experience level

What are you selling?

What kind of sale will deliver the best value?

  • Asset and goodwill sale
  • % sale of shares / equity partner
  • JV
  • Sale of company
  • MBO – the current management team agree a deal to purchase the business from the owner.
  • MBI– a management team come together to look for a business to buy and run.
  • BIMBO – a combination of MBO and MBI where the incumbent management team hiresadditional member(s) into the team in order to compete the deal
  • Trade sale

Tax regime

It is very important from the outset to know what the tax consequences of a sale will be.

  • Capital Gains Tax (CGT)
  • Roll over relief – at least one of the entities that had an interest in the asset before the change has an interest in the asset after the change. The asset either was a partnership asset before the change or becomes one because of the change.
  • Relief – transitional capital gains tax


Does your business have management in place that can run things in your absence? If not, you need to consider the length and type of handover you are prepared to give.

Price Expectations

Are your price expectations realistic? How much would you pay for your business? Educated buyers are smart and will only consider reasonably priced businesses.


How, what and why?

  • Goodwill
  • Maintenance of profits
  • Market multiples
  • Return On Capital Employed (ROCE) – is a profitability ratio that measures how efficiently a company can generate profits from its capital employed by comparing net operating profit to capital employed. Most often capital employed refers to the total assets of a company less all current liabilities.
  • Add backs for personal ownership
  • Net Asset Value (NAV)

Method of Payment

Most buyers may want to defer some of the consideration. Many buyers will be suspicious if you don’t consider an element of deferred payment as it suggests a lack of confidence in your business, or a possible hidden agenda. That said, all deals are unique and structure depends on individual circumstance. Vendor terms or defferred payments in business sales are becoming more and more common. Especially now as the banks are very tough with lending in the current market in Australia.

What Do Buyers Look For?

Being able to supply correct management information in a timely fashion shows that you are organised and efficient. Buyers may lose interest if basic information isn’t to hand. A buyers and his advisers will probably raise the following issues in order to understand your business:

  • 3 years accounts. Monthly management accounts, if in current year
  • Business plan
  • Company literature, brochures etc.
  • Company information, shareholdings
  • Asset inventory
  • Staff: salaries, ages, job titles and length of service
  • Reason for selling
  • Ongoing management
  • Profit record
  • Strong cash flow
  • Strong margins
  • Good management controls
  • Good spread of customers
  • Up to date contracts or agreements
  • Potential for growth
  • Position in the market
  • Strong brand identity
  • Price expectations
  • Tidy well maintained appearance

No Surprises

Most adverse situations, such as landlord/lease problems, outstanding loans, tax arrears, unfavourable equipment leases, health and safety issues, other regulations, and staff problems can be overcome providing they are disclosed.