There are thousands of businesses for sale in Australia at any given time. You can find them in seconds with a simple Google search. Finding a business for sale, or advertising a business for sale is not the hard part. The hard part is actually putting together the deal.
Whether you are buying or selling you need to look at every aspect of the business both for your own due diligence as well as building the contract of sale.
Here are some questions that you should be asking:
Is the structure of the acquisition vehicle appropriate? You will need to think about your 5 and 10 year goals, your exit strategy, your stakeholders (e.g. partner, bank) and any relevant third party requirements (e.g. franchisor). When you get advice from an accountant ask them to put together a real $$ scenario as an example.
What are the assets of the business? Is anything excluded? Should anything be excluded? What security has been given over the assets and what is the effect of requesting that they be paid out? If you sell below a certain price, will you have issues with your financier in relation to (say) an investment property used as security for a business loan?
What licences, permits, authorities, consents or assignments are needed? How will they be obtained? Are there leases and material contracts to be assigned? What happens if any of them are not capable of assignment or the third party refuses?
Employees who remain in the business are entitled to a preservation of their accrued entitlements under the transmission of business rules. Have you considered how this will work? If you think the seller will just ‘pay them out’, consider how the employee will feel or will say when he or she is suddenly paid a lump sum instead of being given the 4 weeks holidays at Christmas time that they have waited 2 or 3 years to take?
If you are selling, what is your plan for afterwards? If you aren’t retiring or moving overseas, you will have to give some careful thought to what sort of restraint provisions a buyer will want to protect their assets.
We can help you work through all of these issues, negotiate terms with the other party and drive the deal through to completion. Best to contact us before you sign a contract. If it’s too late, contact us now.