The process to sell a business online requires you to have all the necessary documents organised. When you place a listing for sale you will receive enquiries from potential buyers. They will want to see certain documents to make an informed decision. The last thing you want during the complex process to sell a business online is a last-minute run around to find them!
There are 3 types of documents that you need to prepare before you think to sell a business online.
A company is worth very little without a financial history. This is why it is important to collate your financial documents before you sell a business online. These financial documents can be used to establish a valuation of your organisation and are the foundation for your sale.
Financial documents include:
Profit and Loss
Tax Records (BAS, PAYG, NOA)
Before you approach your accountant or broker, you need to have your paperwork organised so they can make a professional opinion on what your organisation is worth. They will use this information to set an appraisal and guide you on how to sell a business online. It will also help establish your tax obligations and potential capital gains tax.
In order to sell a business online, the buyer will want to understand all aspects of the company. They need to know how it operates on a day-to-day basis and whether it is a good option for them to purchase. U
Operational documents are usually supplied during the due diligence process and will be required after you have sold. So it’s best to get them prepared early before you start to advertise and sell a business online. You may realise there are documents that need updating and you can work on these months before you advertise the sale.
Operational documents to prepare:
ABN, ACN and GST details
License and registration
Franchise Agreement (if applicable)
Ownership structure and contact details.
Remember that you’re still responsible for any agreements and obligations until the sale is complete. The buyer may be required to take on any agreements the company has entered into, so it's important to have all these agreements ready for review. When it's time to transfer the ABN there are a few obligations you must complete.
Depending on the company the type of assets will obviously be different. If you are going to sell a business online that is, for example, a takeaway for sale or cafe for sale you may have assets such as commercial property, ovens, deep fryers, coffee machines, fridges etc.
Performing an analysis of your assets will help in the valuation when you look to sell a business online. If you sell a business online that is freehold it will obviously include the land titles, and this will increase the asking price. Some sellers may give buyers the option of a freehold or leasehold sale. This allows the buyer to purchase the property or they may rent it from the current owner. Transferring a commercial property to a new owner comes with its own set of tax obligations which should be reviewed before you look to sell a business online.
Understanding all of your assets, whether they are under any lease agreements or owned outright will help in the valuation process. It can also benefit in helping the buyer make decisions if your opportunity has better assets than a competitor.
Asset Documents to prepare:
Commercial Property and Land Titles
Equipment such as
Computers and Technology (e.g laptops, phones, ipads, POS)
Office equipment (e.g. tables, chairs, telephones)
Shop fit-outs (e.g.furniture and fittings)
IPs, copyrights, trademarks
Website and Online Presence
Once you have prepared all the necessary documents and established an appraisal to sell a business online you need to prepare a business memorandum.
This is one of the most important documents that is used whilst communicating with potential buyers when you sell a business online. The main purpose of a Memorandum is to give more details to a potential buyer that isn't displayed in the marketing material. It is prepared for each specific organisation usually by consulting with an accountant or broker.
A Memo is usually supplied to a potential buyer after they have signed an NDA and the owner or agent is confident they are genuinely interested.
A Memo usually includes, but is not limited to:
Industry and Market
Employee Structure (including owner involvement)
Products and Services
Stock on Hand
Equipment (including any lease details)
Financial Performance (e.g. Profit and Loss)
Assets (vehicles, computers, property)
Reasons for Sale
When you look at the list above of the necessary documents to prepare when you sell a business online, you may feel overwhelmed. The process to sell a business online is very different from selling a residential or commercial property. A buyer wants to understand the benefits and risks they are taking on when they buy your opportunity.
As the seller, you need to provide accurate and relevant information that assists the buyer to make an informed decision. During the due diligence process, a buyer will ask for this information. This is how they can review and decide if your opportunity is right for them.
So when you sell a business online get your documents prepared in advance. You don't want to be running around trying to find information when you have a potential buyer, as it can slow down the sale process and may deter them from buying.
Vanessa is the current manager and CEO of Bsale Australia. Over the past 11 years as a business owner, she understands what it takes to grow a ...