Selling your business
Selling your business is a complex process. It is more often that not, one of the largest financial transactions of your life. It is a process that needs careful consideration and planning and also an understanding of how the prospective purchaser of your business thinks.
We can help you in all phases of the selling process including guidance in appraising your business, preparing it for sale and, of course, marketing it (confidentially or otherwise) to achieve the best possible price.
We have a process to help business vendors achieve the best possible sales result and avoid common pitfalls. Our Aim is to: "maximize the client value through superior customer service."
We are committed to providing a high quality service which manages the sale process and ensures that all information is correctly presented in a confidential manner and that the marketing is effective and protects the integrity of the business.
If you are considering selling, we will be happy to provide an evaluation of your businesses’ marketability in today's climate. Be assured of our complete confidentiality. Regardless of whether you plan to sell your business now or at some time in the future, the following information about selling your business should be helpful in your decision making.
The process
The very first step is to meet, to simply see if we can work together. The sale process is never an easy one and will require many meetings and conversations, we become involved in this process with you, so we all need to know we can work with each other. At this meeting we will discuss how you wish to exit from the business, when, and how ready for sale it is. It is often best if possible to do this at your premises so we can gain an overall impression of the business. If this is not possible due to confidentiality we can meet at our offices or elsewhere.
If the business is ready for sale we would then ask you to supply us with financial information so that we can appraise the business. We are required under the Real Estate Act 2008 to appraise a business for sale before entering into an agency agreement to sell the business, and we cannot act on your behalf without an agency agreement.
We would then present the appraisal to you for consideration and discuss our findings and gain an agreement on the value of the business and the possible range within which the business may sell. At this time we would also present a proposal on how we would take the business to market including all aspects of marketing and advertising.
You would then, if you are happy to proceed, enter into and agency agreement with us to sell your business. It is for a specific period of time and we would provide you the Guides for Selling set out by the Real Estate Institute along with the codes of conduct.
We would then set about creating an information memorandum on the business for qualified buyers to assess the business. It would contain: an executive summary, history of the business, what it is and how it works, what products and services it has, who its customers, suppliers and competitors are, a summary of financial performance to enable purchasers to assess the company to make an offer, and other information on stock, assets, staff and premises, leased or owned.
At this time we would also discuss any aspects regarding the readinest for sale and when would be the appropriate time to start marketing the business.
All information prepared about your business, the information memorandum, any marketing information and any advertisements will all be first approved for release by you and no information can be released without your approval.
Once the marketing commences we will field all responses and make enquiries of the interested parties to determine their suitability and financial capability, we will discuss these with you and make recommendations on whom to meet. We will provide you with regular reports on activity.
We will generally always meet with you when a meeting is scheduled with a prospective buyer. It is our role to manage the meetings, tone and timing to ensure the least disruption to your business as possible.
We will present all offers, these will be set out on an Agreement for Sale & Purchase of a Business as prescribed by the Auckland District Law Society. We are vendors agents which means we act, and have a fiduciary responsibility to act, on your behalf and will advise you to the best of our ability how to treat each and every offer. Negotiating is a core component of our skills and we take it as our responsibility to ensure we bring you best offers and negotiate the best outcomes available given market conditions. At this point your legal advisers will also get involved to review the agreement and advise you.
Once we have an offer signed by the purchaser that your are prepared to accept and sign, there will generally always be a period of due diligence, where the purchaser has an opportunity to review in detail the books and records of the company to ensure they getting what they believe they are acquiring. This is probably the most difficult and complex part of the sale, providing only what is actually necessary to allow due diligence to be satisfied for the sale to become unconditional. 75-80% of all sales that don't complete fail here. We have processes to absolutely minimise the chance of this happening. Generally if the purchaser fails in due diligence it is generally because of their inability to complete not the vendors.
Once due diligence is complete and the purchaser declares themselves unconditional the deposit is paid into the Barfoot & Thompson Trust Account until settlement and we move to assisting you in getting the business ready for handover. We will assist you with the list of things that will need to be handed across to the purchaser on settlement date. Your solicitors will again advise on settlement matters and any issues that will need to be resolved on the day.
Settlement. Hopefully by now this will be straight forward process and once you have been advised that settlement has taken place you can sit back and look forward to your next adventure.