Commercial Law
Ten tips to guide you through the process of selling your business efficiently and effectively.

In our commercial law practice here at Ezra Legal, we frequently assist clients who are contemplating the sale of their businesses. The process of selling a business can be intricate, necessitating comprehensive knowledge and preparation. In this article, we share ten simple tips to help guide you through the process of selling your business efficiently and effectively:

  1. Strategic Planning:
    Selling a business demands good strategic planning. Initiate the process by outlining your objectives, establishing realistic timelines, and determining your preferred sale price. A well-defined plan will serve as your compass, enabling you to make informed decisions at every juncture.
  2. Engage Professional Advisors:
    Engaging with your accountant at an early stage is a given, engaging the services of an experienced solicitor specialising in business sales or commercial law at an early stage can avoid delays and ensure matters that may not ordinarily be considered by an accountant are addressed early. A good commercial solicitor should deftly identify and navigate the salient issues, consider contracts that are either in place or required to be put in place, advise you of additional documents you may need to protect your business through the process such as confidentiality agreements, and then work through the due diligence process, contractual negotiation and settlement issues to facilitate a seamless transaction.
  3. Financial & Contractual Recordkeeping:
    Prospective buyers will scrupulously examine your financial records; therefore, it is imperative to ensure their accuracy. Organise your financial statements, tax returns, and other pertinent documents meticulously to provide a comprehensive overview of your business’s financial health. Buyer’s will likely want to view at least 3 years’ worth of financial records and any dispute could potentially involve events going back at least 6 years, so ensure your records accurately reflect the financial position and growth of your business. Collating material contracts with customers or suppliers for review as well as considering stock levels and plant and equipment lists in readiness for analysis by potential purchasers is a must. What security interests are registered over items of plant and equipment or the business generally? What information can you easily provide relating to employees; start dates, periods of service, applicable award and rates, accrued entitlements etc should all be easily capable of communicating to a potential purchaser.
  4. Accurate Business Valuation:
    Determining the appropriate asking price for your business is important. Collaborate with your accountant or a business valuer to objectively assess its value. Overpricing or undervaluing can deter potential buyers or result in a loss on your part. What is unique about your business that might be reflected in a higher price? What similar businesses have sold in your industry that might be useful as a guide?
  5. Enhancing Business Appeal:
    Maximise the appeal of your business to prospective buyers. Prioritise the maintenance of your premises, streamline operations, and concentrate on bolstering profitability for at least 12 months before listing your business for sale. What are the threats or opportunities that a purchaser may face or be able to capitalise upon? The old “SWOT” analysis (ie Strengths, Weaknesses, Opportunities and Threats) can be a useful document for guiding discussions with purchasers, and advisors for that matter.
  6. Confidentiality:
    Maintaining strict confidentiality throughout the sale process is paramount to safeguarding your business interests. Only disclose sensitive information to serious buyers who have executed some version of a non-disclosure agreement (NDA). Additionally, it is prudent to avoid informing your staff about your intention to sell, as this knowledge may trigger uncertainty and potential staff turnover that could impact the smooth functioning of your operations, as well as completion of the sale.
  7. Engage a Business Broker (if applicable):
    Depending upon your business’s size and nature, consider enlisting the services of a reputable business broker to facilitate finding potential buyers and assisting negotiations. Their involvement can alleviate some of the burdens associated with the process. A motivated broker or specialist consultant can add considerable value in the process and may extract a far higher price than you might imagine.
  8. Comprehensive Contractual Compliance:
    Work closely with your solicitor to review all essential contracts and legal documents and ensure you are in compliance with their requirements. This encompasses supply agreements, customer terms of trades, property leases, sale agreements, warranties, plant finance agreements, licenses, trade marks, business name registrations and any other relevant documentation. It is also crucial to verify that there is certainty of tenure at the location from where the business trades and that the term is sufficient for a prospective purchaser; otherwise, negotiating a lease extension with the Landlord may be necessary to enhance investor appeal, which can delay or even jeopardise a potential sale.
  9. Rigorous Due Diligence:
    Buyers will conduct extensive due diligence to assess the risks and potential of your business. Be prepared to furnish accurate information, promptly address inquiries, and mitigate any concerns that may arise during this phase. Having all your business documents, including information regarding debtors and creditors, employee entitlements, inventory, and any security interests ready to hand will allow you to receive the best advice as efficiently as possible.
  10. Focus and Effective Communication:
    The sale of a business can be a time-consuming and emotionally taxing process. Maintain unwavering focus on your objectives, keep regular open lines of communication with your advisors, and don’t be phased if there are further negotiations and potential obstacles along the way.

Selling a business represents a significant decision requiring much deliberation and expert guidance. By considering these ten tips, you could enhance the prospects of a successful sale and remove some of the pain and anxiety for both yourself and the buyer.

At Ezra Legal, our team of commercial lawyers know that clear and accurate commercial advice on legal compliance is critical to your commercial success. We provide commercially relevant legal and strategic advice on complex business transactions, striking the right balance between legal considerations and commercial reality.

For more information and expert advice to ensure that your business sale or purchase goes smoothly, ask to speak to a lawyer at Ezra Legal on (08) 8231 6100 or email

For information on the range of commercial legal services that we provide at Ezra Legal, head to:

Michael Fabbro


Ezra Legal

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