How often do businesses sell – what is the selling cycle?
Over the past 30 years Australian businesses owners of small to medium enterprises (SME) keep their business for between 5-7 years before changing hands. Over the past decade the average owner buy and sell every 5 years , this is known as the selling cycle , it can be reasonably concluded therefore that around 15-20% of SEM are some currently for sale or are coming onto the market within 12 months .
It is best to prepare your business for sale prior to actively placing your business on the market :
· Have a current lease or sub lease in place
· Profit & Loss statements and tax returns
· Balance sheet and depreciation schedule
· Obtain independent valuation on asserts
· List of plant and equipment
· Obtain advise on tax issues from your accountant or financial advisor
· Off load surplus asserts not needed in the business
· Reduce surplus stock and tighten up debtors
· Improve the transferability of the business by having systems and procedure manual in place
· Hold off major capital purchases prior to selling