Important
We are about to see a significant wave of retiring baby boomers in Australia. Many of them are business owners. If you are even remotely considering exiting in the next three years, now is the time to start getting your house in order.
We are about to see a significant wave of retiring baby boomers in Australia.
Many of them are business owners.
And over the next few years, a lot of those businesses are going to hit the market.
Here is what I find fascinating.
If we are selling a car, we detail it. If we are selling a house, we paint it, declutter it, and mow the lawn.
But when it comes to selling a business — often the biggest asset someone owns — we do very little.
And that can cost a lot of money.
The Real Risk of Leaving It Too Late
When succession planning is left to the final 3–6 months, a few predictable things happen:
- Sale price drops.
- Buyer interest weakens.
- Staff and customers are left uncertain.
- Tax opportunities can be missed.
- The legacy you built starts to unravel.
Most small business owners care deeply about their staff and customers. Many will say the business has been “their baby”.
Yet when the time comes to exit, they often do not prepare it properly for sale.
That disconnect can be expensive — financially and emotionally.
This Is Not a Six-Week Auction Campaign
Selling a business is not like selling property.
There is no quick auction campaign. There is no guaranteed emotional bidding war.
In many cases, it can take months — sometimes years — to position, market and negotiate a sale.
That is why I often suggest thinking three years out.
If you are even remotely considering exiting in the next three years, now is the time to start getting your house in order.
What Does “Getting Ready for Sale” Actually Mean?
Let us make this practical.
1. Know Your Clients — “Who’s Who at the Zoo”
A buyer needs to understand:
- Who your key customers are
- Who the decision-makers are
- Who is the main contact
- How the relationship actually works
- Any quirks or nuances
For example:
- Does one client only respond to phone calls?
- Does another require Saturday deliveries?
- Is there a key relationship that lives entirely in your head?
If that knowledge walks out the door with you, the business value drops.
2. Clean Financial Records
This is non-negotiable.
Your Xero, MYOB or QuickBooks file should be:
- Up to date
- Cleanly coded
- Easy to analyse
A serious buyer will want to:
- Drill into sales by customer
- Understand margins
- See trends
- Identify concentration risks
If your data is messy, it creates doubt.
And doubt reduces the price.
3. Supplier Profiles Matter Too
It is not just about customers.
Document:
- Key suppliers
- Trade terms
- Contact details
- Delivery expectations
- Any informal arrangements
Example:
- Do they deliver on Saturdays?
- Do they require someone on-site to unload?
- Are there handshake agreements not written down?
Buyers do not like surprises.
4. Get HR in Order
This is where things often get uncomfortable.
Make sure you have:
- Employment agreements up to date
- Job descriptions documented
- Clear roles and responsibilities
Also consider:
- Key staff strengths
- Weaknesses
- Skill gaps
If there are glaring gaps, you may want to address them before going to market.
A business that relies entirely on the owner is harder to sell — and usually sells for less.
5. Systems, Templates and Procedures
If you have done something for 20 years, you probably do it without thinking.
That is a risk.
Break it down into steps:
- Procedures
- Checklists
- Quality control points
Build a library of:
- Template emails
- Letters
- Spreadsheets
- Standard forms
6. Document Management
If you do not have a document management system, at least create:
- A logical folder structure
- Consistent naming conventions
- Clear client and supplier files
Start now.
History matters. Buyers like to see continuity and order.
Who Is Your Likely Buyer?
This question changes how you prepare.
Your buyer might be:
- A staff member or management team
- A competitor looking to expand
- A complementary business
- An unrelated third party via a sale platform
Each buyer type will look at the business differently.
Preparation should reflect that.
The Tax and Structuring Angle
This is an area where assumptions can be costly.
There are small business CGT concessions and other structuring considerations that may apply (depending on the facts).
But:
- They often require forward planning.
- They can be impacted by actions taken years before the sale.
Leaving it until the final few months can mean:
- Missed concessions
- Unexpected tax outcomes
- Regret
This is why seeking advice early — from your accountant, business adviser or broker — is critical.
Not at the tail end. Years in advance.
The Human Side of Succession
There is a bigger picture here.
When a business simply winds down because the owner is tired or overwhelmed:
- Staff can be left scrambling.
- Customers are left without support.
- Community goodwill disappears.
Most business owners genuinely care about these things.
Proper succession planning:
- Protects your staff.
- Protects your customers.
- Protects your legacy.
- Maximises your financial outcome.
That is a win on all fronts.
The Bottom Line
If you are thinking of exiting in the next three years:
- Start now.
- Clean up your financials.
- Document your relationships.
- Formalise your HR.
- Build your systems.
- Seek advice early.
It will not be easy.
There will be tasks you would rather not do.
But as with most worthwhile things in business, preparation pays off.
And when the time comes to sell, you will not just be handing over a business.
You will be handing over a well-prepared, valuable asset — and walking away knowing you did it properly.
Disclaimer: This article provides general information only and does not take into account your personal circumstances. It is not financial or tax advice. You should seek independent advice from a qualified professional before making decisions about tax, legal or financial planning matters, along with loan structures or entity structure.
