Selling your business.
The first step in selling a business is trying to put an indicative value on it that both you and us are happy with to ensure a positive sale.To help achieve this we now have business apprasial software which can move us one step closer to giving a more accurate value. We also have access to BizStats to draw down comparable other sales of similiar businesses.
Call us today for more information.
Here are some of the most frequently asked questions about selling your business.
There are normally three main costs involved in the selling process:
- Commisson
- Setup and Marketing
- Legal Fees
Our standard business fees are as follows:
Firstly a setup fee of $600.00 plus GST and then the greater of either the minimum fee of $11,000 plus GST or the total amount (plus GST) calculated based on the following schedule:
A fee of 8.5% on the first $500,000 of the sale price and 5% on the balance of the sales price.
The setup fee is paid up front and includes web based marketing / professional photography package, a basic Information Memorandium and required admin setup for a small to medium business.
The selling fees are paid once the transaction is unconditional and through your lawyer.
At Mike’s we specialise in personnalised commission and marketing packages tailored for each individual business sale we’re engaged in. We’ll meet up with you and explain everything in detail so there’s no hidden surprises.
Your lawyer will be able to give you an indication on their costs as this will vary depending on the complexity of the sale.
Firstly we need to get access your financials (preferably three years) to run the numbers and get an idea on the value. Your accountant should be able to provide a set of financials which they will prepare for the sale of your business.
Secondly you’ll need to list your business with us and complete a Anti Money Laundering (AML) verification for ID purposes as we can’t be involved till this is completed. Its not as bad as it sounds and normally producing a passport or Drivers License will be ok plus a utility or bank statement with your name address on it as well as filling in a form we’ll supply. Once you engage a lawyer you’ll do the same again.
Once listed then we’ll go over a extensive check list with you and gather up the lease, chattels list, details about the business etc and what is included in the sale to compose a detailed information memorandum that can be supplied only to verified buyers. This will involve a few meetings to check that we’ve got it right and your happy with the information.
As far as the physical side of the business its time for a spruce up, clean and declutter, maybe a paint job, signage etc. Once your ready for photos we can then get you online Having a quiet chat with your landlord is also advisable about your lease if applicable.
We knows what sells property for a premiuim and what also stops buyers from paying top dollar.
Once “unconditional” the lawyers step in and the agent normally steps back apart from any inspections etc closer to settlement. As a rule settlement is normally between 4 -6 weeks from unconditional date, but these dates can vary either way. As mentioned above an AML check will also be done by your lawyer and then they will arrange for papers to be signed for the transfer of lease etc We advise engaging a lawyer at the begining of the sale process and also involving your accountant. Your lawyer will guide you through this.
It will feel like your in limbo once sold as the selling activity ceases and the numerous agent calls will slow down. As far as your obligations, go they are keep the business up to the same agreed standard as when the contract was signed and be ready to give vacant possesion to the buyers on settlement day. You will in most cases have a stock take to do and present to the new buyers prior to settlement. We personaly advise if possible to organise a move out at least a day or two earlier than settlement as this gives time to finish the clean up and is a lot less stressfull.