The selling process

Having an idea of the process involved is important and should include the following milestones.

Prepare the business for sale

Having a clear understanding of exactly what you want to sell is crucial. You will need to consider things like the following.

  • Are you selling the trading name only or the registered companies behind it
  • Will you sell all the assets or some of the assets
  • Are you selling the property freehold
  • Will you sell the intellectual property, patents, trademarks etc.

Prepare financial and profile information

The financial information of the business for sale is critical to not only complete a market appraisal but also allows a buyer to do their own due diligence on the business to establish if it is fair value.

Typical financial information you should prepare includes.

  • 3 – 5 years Profit and Loss, Balance sheets of the business for sale
  • 2 years Bas statements
  • Asset register (all plant & equipment)
  • Lease terms and options

The business profile is to consider the strengths of the business for sale and its operations. Some of the typical information would include

  • Location
  • Trading hours
  • Plant and equipment
  • Contracts

CPI Business Sales will supply a full checklist for you when we list your business.

Market appraisal

A market appraisal is an opinion as to the approximate value of your business. This allows you to make an informed decision as to where to set your sale price. The market appraisal is completed after review of your financials and business profile. (See – What is my business worth)

Set sale price and terms

The sale price is the most important part. Understandably you want to get as much as you can for your business sale, and you should set the price as high as you can taking into account the current market place. If you set it too high, you will not only scare off potential buyers, but also run the risk of declined bank finance for keen buyers.

There are other things you can do to also add value or comfort.

  • Restrictive trade terms
  • Training periods or contract advisory services
  • Strategic planning for the business
  • Vendor finance

CPI Business Sales will work with you to establish a fair value and terms.

Appoint agent through a Business For Sale Authority

Once you agree on a sale price and terms you complete the Business For Sale Authority. This document appoints the broker as your agent and also sets out things such as type of appointment and how much the broker fee for service is.

Prepare advertising and business profile

You will need to establish how and where you want to advertise, but you do need to advertise to let potential buyers know the business is for sale. A few points to consider may be.

  • Do you advertise specific or general? Bay Point Café or local Café
  • Does the broker have a web site for local enquiry
  • Does the broker recommend a national / international web site
  • Do you advertise in the local paper

The business profile is also an important document. This gives the buyer information specific to your business to promote the business for sale. This is usually broken into further sections.

  • Basic details for web pages
  • Basic flyer information
  • Specific details following vetting and signing of the Confidentiality Agreement

CPI Business Sales will work with you to establish a marketing plan.

Qualify purchasers

Enquiries about your business for sale need to be vetted to eliminate any non-genuine enquiry from competitors and non-financial buyers. Once the buyer is considered to be genuine they would need to sign a Confidentiality Agreement to receive specific information.

Arrange onsite meeting

After advancing an enquiry to be a genuine buyer, the broker will work with the customer to answer all questions to the point of needing to inspect the business for sale to advance the sale contract. This should be arranged at a time suitable to the seller which may include out of hours when staff has left for the day.

This is something that CPI Business Sales will work with the vendor on a case by case basis.

Negotiate a mutual sale agreement through the business broker

This is the most important and difficult part of the process. A buyer will be guided by his professional advisors as to the perfect terms and price, and a seller also guided by their professional advisors often with differing opinions based on tax and legal implications. This is where it is critical to maintain all negotiations through the business broker to avoid tension between the parties.

At this point you would have engaged your legal advisors and completed a Business For Sale Agreement to start the formal negotiation. Some of the items that may be raised besides price include.

  • Apportion of values to assets and stock
  • Lease terms
  • Take over date, conditions and training
  • Restrictive trade terms

CPI Business Sales works closely with you and your professional advisors to make this a smooth transaction.

Due diligence

It is not uncommon for a contract to have a due diligence clause allowing time for a buyer to seek professional advice to review the information of the business for sale.

This may contain the following.

Financial Records

  • Profit and Loss, Balance sheets
  • Cash deposit records
  • BAS

Business Operations

  • Insurance
  • Suppliers
  • Plant and equipment
  • Stock and WIP


  • Leases
  • Employee contracts
  • Client contracts
  • Work health and safety or industry compliance

Complete pre-settlement conditions such as stock-take

On or about settlement there may be a need to finalise contract conditions to allow a balancing of funds. This may include the following.

  • Stock-take
  • Plant & equipment inspection
  • Bank account closing balances

Implement post-settlement training etc.

Depending on the terms of contract, you may have negotiated a period following settlement to stay in the business to train the buyer, or act as a consultant for a set period of time. As you are contractually committed to this, it is important to understand what your commitment is.

Need funding? – CPI Finance has experience and access to a range of lenders