Selling Your Business In South Australia: What You Need To Know
Selling a business is a big decision to make. You may have invested a lot of time and money in your company, so deciding to move on is a significant change. What's more, there are thousands of businesses for sale in Australia at any time, so how do you make sure you get the best deal for all your hard work? If you're thinking of selling your business in South Australia, learn more about the sources of help you can turn to, and how you can decide what's right for you.
Choosing to sell your business
People sell their businesses for lots of reasons, and it's important to remember that this isn't always a purely commercial decision. Some people decide to move on for personal reasons, or because their health means they can no longer run a business. Of course, many people are unsure if selling is the right decision, so it's always worth getting professional advice.
People you can consult include:
- A government advisor. The South Australia Small Business Referral Service can offer you support.
- Your solicitor. He or she can help you understand if there are any legal issues if you decide to sell or transfer your business.
- An accountant. You may need to consider the tax implications of selling your business.
A financial counsellor can also help you look at your personal finances and see how selling your business could affect your income.
Establishing business viability
In some cases, you may not feel your business can survive. Your business is only viable if it can return a reasonable profit or has enough cash reserves to keep going through a period of low turnover. This will be a factor that potential buyers will consider before making you an offer. The Australian Tax Office publishes an online tool that can help you decide if your business is still viable.
In South Australia, the government offers several grants and other types of funding types for local businesses. State funding is also available for certain manufacturing, exporting and energy efficiency businesses. You can use the local government's GRANTassist tool to find grants that could improve your business viability. If you can secure funding, it might make it easier to sell your business.
Transferring your business
You may also decide to transfer your business rather than selling outright. In South Australia, if you decide to do this, you may need to pay stamp duty on the market value or consideration of business assets. You'll need to draw up a contract with the person taking over your business, which clearly outlines the terms and conditions of the transfer.
For all new transfers in South Australia, you will pay an increasing rate of stamp duty, starting at $1.00 for every $100 if your business value does not exceed $12,000. If your business is worth more than $500,000, you'll need to pay $21,330 plus $5.50 for every $100. Given the significant difference in tax contributions, you should consult a tax advisor before entering into a transfer agreement.
Getting the best price for your business
It's not always easy to find a good buyer for your business, and it's often difficult to know the market value of your company. A licensed business broker can make the process easier for you.
Business brokers have insight and experience in the local business market. Your broker can value your business for you, and can make sure you get the best possible price. If you run a specialist business, you may need to consider a detailed marketing plan, and a broker can help you decide the best way to reach out to potential buyers.
A broker can also help you make the important decisions. For example, you will need to decide how quickly you need to make the sale, and how much cash you want to receive at the close. You may even want to hold a minority stake in the business. A business broker can help you work through these (and more) decisions.
Selling your business is one of the toughest decisions you may ever need to make. Talk to an expert like Ellis Corporate, and get specialist advice before you decide what to do with your South Australian company.