Selling a Business for a Profit | Aldes Business Brokers

Preparing the Exit Strategy – Selling a Business for a Profit

Preparing the Exit Strategy – Selling a Business for a Profit


True, when you started the car wash venture, it may not have been with the possibility of selling in mind. This may also be the case with your restaurant, vehicle fitment centre, accounting practice, nursery school, or perhaps a micro-loan venture. However, it is wise to make provision for an exit strategy in your initial business plan. Even if you haven’t done so, you still need to prepare documents, information, and assets for selling a business.


To this end, let’s consider what is needed for selling a business such as a gift store, restaurant, hairstylist salon, etc. Taking care of the essentials in preparation for the sale will help you to achieve the best possible market price and reduce your risks.


What Information Is Required for Selling a Business?


It depends on the particular industry, but your broker will require an asset list (movable and immovable), intellectual property included, excluding assets not forming part of the sale, and historical financial statements.


Why Are Financial Statements Important?


Regardless of how well your florist shop, food truck, party venture, or equipment hiring business has performed over the years, the buyer will want to inspect the financial statements. Tax returns are normally required, and the buyer will probably want to review at least three years of financials. For a venture in operation for less than a year, simply provide the statements for the months in operation. It also helps to have the statements audited for credibility.


Assets in the Venture


The asset list makes take-over after purchase easier and helps to prevent misunderstandings between the seller and buyer. It provides a written confirmation of assets included, ensuring that both the buyer and seller have a record against which to compare what has been received by the buyer.


Appraisal Information


Obtain a valuation of the entire venture. The broker will be able to assist in determining the market value of the venture, using industry-proven methods of appraisal.


Client, Supplier, and Debtor Lists


Prepare a list of existing clients and their contact details. Do the same for suppliers. In the instance of a restaurant, you may buy fish from a specific supplier, liquor from another, and have gas delivered once a week. This information is important and so is the current lease agreement and landlord details. Also, list debtors and payment terms.


Licences and Permits


Although many licences and permits cannot be transferred to the new owner, it is imperative to have such available for inspection.


Employee Records


Prepare employee contracts and work history files for the new owner. Even though potential buyers may not immediately want to inspect policies, procedures, and legislative compliance, the information will be needed once at the actual sale stage.


Most Important Step


Benefit from a seamless sales process. Get help selling a business from a professional broker in South Africa. We have branches across South Africa, a large database of potential buyers, and the resources to market the venture for sale. Give us a call for more information and assistance in the listing, marketing, and selling of your business.