Tips For Selling a Business in Melbourne Australia

There are some crucial steps to take when selling a business in Melbourne, Australia, or elsewhere.

Some considerations include the legal requirements, which differ from country to country. Do you know how much and what type of tax you might need to pay? If that was not stressful enough, there are specific obligations under the Fair Work Act 2009 if you have staff.

Selling a business can be straightforward when you know what steps to take before listing and once the deal is done.

If you plan to sell your business in Melbourne, here are some steps to help you.

Selling Your Melbourne Business

Selling a business isn’t a copy-and-paste process for everyone. Different industries require different tasks and documentation when transferring ownership. However, there are some standard tasks that every business owner must perform as part of the sales process.

Business Reporting

One of the first steps in a business sale is business reports.

During a business sale, your business is scrutinized, with financials, operations, and documentation checked. This includes not just the current year but as many as five years.

Your business reports fall into three categories, general business, employee records, and company records:

• General business records – sales and purchases, payments to employees, freelancers, payments to suppliers,s and other companies. Registration certificates (business name, trademarks, domain ownership)
• Employee records – provide up to seven years of records of salary and freelancer payments, contract and employment contracts, Superannuation payments,s and tax paymen.ts
• Company records – seven years of records of financial statements, company registrars, company minutes, and resolutions. Some of the reports will include profit and loss, balance sheets, BAS, and tax returns.

Legal Stuff

Use a lawyer throughout the sales process and familiarise yourself with your legal obligations as a business owner. While having a broker (which we’ll discuss next) is helpful, if you don’t adhere to legal requirements during the sale of the business, you, as the owner, could still be held liable.

Business Sales Agreement

There will be a business sales agreement. It should include the sales price, list of assets, handover process, and payment method.

Vendor’s Statement (Section 52)

Did you know you must include a Vendor’s Statement (Section 52) if the sale price is $450,000 or less in Victoria?

Other legal information to have ready to share includes

• Key contracts (customer, supplier, lease, franchise)
• Licences, permits, and ABN/company registration
• Ownership structure (assets vs. shares/units), including any partnership or shareholder agreements
• Marketing materials, website, and client database
• Operations manual or key procedures
• Documents confirming release from ongoing liabilities after-sale

Additionally, suppose you are leasing a business premise. In that case, you must get consent from the landlord to reassign the lease of the business over to new owners or that you sub-lease within the boundaries of your terms of the lease. Use your lawyer regarding contracts, especially your lease and what you can do with it.

Plus, if applicable, include any restraint of trade or non-solicitation terms in the Contract of Sale.

Hire a Business Broker

This is optional, but hiring a business broker would be in your best interest.

Brokers essentially manage every part of the sale of a business. While many people hire them because of their lack of time and need for extra hands to manage the paperwork of a sale, business brokers offer much more than that. As professionals in the industry,

Australian business brokers know the business landscape in Australia well, including the legal requirements and how to market a business effectively. With this, you get someone to market your business, source buyers, negotiate, and settle a sale.

Business Valuation

The core task for a business broker is to appraise the business. What is its value? To ascertain this, the business broker needs to consider revenue, asset value, and external impacts like industry standards and market trends.

Your business broker will also view your business records and financial statements to ensure they are in order and use them to create normalised accounts, which focus on presenting maximum operating profits after adjustment for non-operational expenses.

Other Tasks

Other tasks include:

• Create marketing materials and list the business for sale
• Screen and qualify potential buyers, arrange inspections
• Negotiate terms and offers
• Assist with the contract process
• Liaise with lawyers, accountants, and other advisors
• Help manage the transition to new ownership

The key is ensuring you’ve got a business broker you can trust with your company data.

Hiring The Right Brokerage

Selling a business in Melbourne can be easier or more challenging, and a significant factor is whether or not you go through the right brokerage, if at all.

Some brokers have the experience and connections to help you sell your business to the right person faster.

Here is a helpful page from Benchmark Business Brokers in Melbourne, where you can get help from award-winning business brokers who can help make selling your business a breeze.

Final Thoughts

Approach the sale of your business the right way, and you’ll avoid any costly legal or otherwise errors that could impact your business’s valuation. Above all, hire a professional who knows the industry and how to sell your company in the most effective way possible.

Selling a business in Melbourne can be challenging, but it doesn’t have to be.