Getting to the point of a smooth and successful business exit doesn’t start the minute the business goes live online. The process for a seller to achieve the best outcome for their sale is one that has continued across their business journey, in making their business viable and resilient, attracting the right kind of buyer who will put the right offer on the table.

Across this series which details the planning required to exit your business, wealth extraction is a theme that runs through most sections. The planning and systems you have in place today will inform the maximum value you’ll get from your business at the point of sale, so what does that mean for your timing? It means looking ahead, and if you’re in a position to, it’s recommended that you start planning your business exit several years before you take action, and this means reviewing wealth extraction and obligations.

Maximum Wealth Extraction

Even if you’re not considering a sale today, what would you value your business at if you were going to put a “for sale” sticker on it right now? Are you happy with that figure? If not, you might need to consider how you’ll maximise your business value (which we have a dedicated blog about here at Finn).

Consider also a pre-sale review with a business broker where you can target any under-performing areas, and don’t forget the basis. An organised balance sheet, a cohesive and happy team of staff, lean expenses and streamlined processes and operations (as well as, of course, a regularly updated business plan document with a view to grow) are all essential to a successful sale.

Don’t miss out on potentially thousands (or more) of dollars because you didn’t keep the right records, or you forgot to plan ahead.

Obligations to the Buyer

At the end of your sale process, having hopefully achieved the offer you were hoping for, you’ll have several obligations (which will have been detailed in the contract of sale and meetings prior) to the new buyer in order to facilitate a smooth handover.

Remember, if you do fail to fulfill these, you can face legal consequences, so although you might be ready to book that flight to a tropical destination, ensure you factor into your timeline these additional steps.

First comes some of the technical handover steps, many of which should already have been handled across sale paperwork, but are worthwhile double checking (and a business broker can assist here by ensuring you’ve dotted all the is and crossed all of those ts).

Are there any business licenses that need to be transferred or cancelled entirely? You can visit the ABLIS (Australian Business Licence and Information Service) website to confirm.

Have you checked in with the ATO? There will be updates that need to be completed post sale, so stay on top of this paperwork to ensure you don’t get any surprises during tax time.

Will you be selling your registered trademarks, and is the new buyer in possession of required paperwork or logins? For companies, is ASIC aware of the sale?

If you have a lot of active subscriptions, permits or licenses, be sure to transfer these or cancel as needed, so you don’t continue to pay for them unnecessarily.

For those with physical premises and leases, keep your landlord looped in as they will need to sign off on a lease transfer and confirm costs involved.

On the “softer” side of the business handover, you may need to make those introductions to key suppliers, clients and of course, your employees. A handover training period may be required, as well as all the “day to day” essentials like alarm codes, keys and copies of, power and internet providers details.

Remember: the last thing your new buyer wants is to have to start trying to get in touch because Telstra is refusing to switch the account ownership without your express permission!

So, now that the handover is complete and you’ve both your wealth extraction and obligations, you’ve successfully exited your business. In the final part of this series, we’ll go back to basics with a guide to record-keeping and doing the right thing, which will serve you well now, and for any businesses you own in future.