1. Create a plan
It can take an average of 6-9 months for a fully prepared, well-marketed and priced business to sell in a capital city. Regional areas can take up to two years, if they sell at all.
2. Know your Nett Cash Out Position and Sale Price
Knowing how to calculate your Nett Cash Out position is vital when you wish to sell your business. Nett Cash Out will determine whether you are ready to sell and validate any predetermined ‘need price’.
There are many variables and complexities to arrive at a specific number. EBS can provide you with a simple guide to enable a quick calculation.
Once you have followed the steps to determine your approximate nett cash out figure, speak to your accountant to find out your tax outcome based on this figure. The tax to be paid is highly dependent on many factors.
Then ask yourself ‘Is this enough for me? Am I ready to exit?’
Sale Price: How do I calculate what my business is worth?
Selling your business is a big decision. Education and a clear understanding is critical to achieve the outcome you desire.
There are two common ways to establish your business worth
Valuations: Given for a specific purpose and are usually inflated compared to the actual price a business sells for
Appraisals: Show you the likely price range your business will sell for
So, how do you work this out?
There are two parts to a sale of a business - price and conditions.
Price: How much cash per year the business is likely to generate is usually calculated based on historical performance. Businesses with a minimum of 3 years trading history paint the best picture.
It is worth organising a proper appraisal to get this done correctly and establish a more exact sell price.
Conditions: Buyers often introduce conditions to the sale which can carry just as much weight as the price.
If you need guidance to grow your business or if you are planning to Buy or Sell your business