Knowing why you’re selling your business is important to know. Why?

• Potential buyers are likely to ask this question, so it’s good to have a clear response.
• Your response will inform how you go about developing a succession plan.

Is my reason for selling the right one?

People sell businesses for many different reasons – to make a change and realise new opportunities, because of issues with a business partner or simply to retire and realise profits from the business.

There is no right or wrong reason to sell a business. However, your reasoning may impact your approach to developing a succession plan. If you’re selling a business because of financial problems, it’s worth considering the following.

Selling a business because of financial difficulty

Selling a business often comes with additional payment obligations, including tax from the sale of assets, employee entitlements, and other costs associated with selling. If you’re selling because of financial issues, these costs can make the sale even more challenging.

Before you decide to sell, we recommend speaking with a professional accountant or business advisor to ensure now is the right time.

In many cases, certain steps can be taken to prepare the business for sale, which will increase the return on investment. These actions can mean putting the sale off for a period of time, but in the long term, you will achieve better returns.

If you’d like to speak with us about whether your business is ready to sell, please get in touch with Connolly & Associates.