Preparation is Key: Selling Your Business – The “Before You List” Guide

Selling a business is rarely just one transaction. It is usually a chain of approvals, documents, disclosures, and timing, all of which can be issues that can either build buyer confidence or derail a deal at the last minute. The best sales outcomes tend to come from business owners who prepare early, control the information flow, and remove “surprises” well before the buyer’s due diligence begins.

Below are some of the key issues to think about before you go to market:

1. Start With the Big Question: What Exactly Are You Selling?

Most business sales are structured as either:

  • An asset sale: sale of the business assets, including plant and equipment, stock, goodwill, intellectual property, customer contracts, often leaving the selling entity behind; or
  • A share/unit sale: sale of the company or trust interests that owns the business, meaning the buyer inherits the entity and, potentially, more historical risk.

The right structure affects tax outcomes, what consents you need, what liabilities move across, and how attractive the deal is to buyers. Locking this in early lets you prepare the right documents and reduces the risk of any late-stage renegotiation.

2. Approvals That Can Make or Break the Deal (Franchisor, Landlord, Financiers)

Franchisor consent (if you are a franchisee)

If your business is a franchise, your franchise agreement will almost always control:

  • whether you can sell,
  • the process you must follow,
  • the franchisor’s consent requirements,
  • training/approval of the incoming buyer (as a new franchisee),
  • transfer fees and documentation.

A practical tip is to start this conversation early. Delays often occur because the buyer cannot be “approved” quickly enough, or because the seller has not met the pre-transfer obligations, as required by the franchisor.

Landlord consent (if you lease premises)

If your business operates from leased premises, the lease usually dictates:

  • whether an assignment is permitted,
  • what conditions apply (financial information, references, bank guarantees, deeds),
  • whether the landlord can require lease variations.

A sale can stall if landlord requirements are only discovered after contracts are exchanged.

Financier and security releases

If there is business lending, equipment finance, personal guarantees, or securities registered over business assets, you may need:

  • payout figures and release documentation, and/or
  • arrangements for the buyer to take over or refinance.

Other approvals you may need (depending on the business)

These vary widely by industry and location, but can inclulicence/permit transfers (equipment, liquor licences),

  • regulatory notifications,
  • third-party consents under key supplier or customer contracts, and
  • approvals tied to specific assets (for example specialised equipment or regulated products).

3. Sell Faster (and Often for More) by Preparing for Buyer Due Diligence

A buyer with a good advisor will request detailed information from a seller early. When information is incomplete, inconsistent, or hard to locate, it creates three predictable outcomes:

  • the buyer asks for a price reduction,
  • the buyer demands stronger warranties/indemnities, or
  • the buyer walks away.

Your goal is to make the due diligence process easy, so it is best to organise your documents, ensure they match, and fix any issues before a buyer finds them.

4. Contracts, Warranties, and Restraints: Protect the Value You Are Selling

A business sale contract will typically deal with:

  • what is included/excluded (assets and liabilities),
  • the purchase price mechanism (fixed price vs adjustments),
  • deposit and completion mechanics,
  • conditions precedent (consents, finance, due diligence),
  • warranties and indemnities,
  • handover, training, and transitional support; and
  • Restraint of trade / non-compete.

Buyers commonly require restraints to protect the goodwill they are paying for. A restraint clause must be drafted carefully. If drafted too broad, they may be challenged; too narrow and they may not protect value. This needs a tailored approach to your industry and geography.

5. Financial Documentation: Get It Buyer-Ready

Before you go to market, expect to be asked for:

  • financial statements and management accounts,
  • bank statements and reconciliation support,
  • BAS/IAS and ATO-related documents,
  • details of add-backs and “owner benefits”,
  • stock and asset registers, and
  • forecasts and assumptions (if you are providing them).

A common pitfall is presenting “headline profit” figures without clear support. If a buyer cannot verify earnings, they will discount the price or push risk back onto you contractually.

6. Employment Matters: Clean Records Reduce Risk

People issues are deal issues. A buyer will focus on:

  • who is employed, on what terms, and at what cost,
  • leave balances and entitlements,
  • awards/enterprise agreements (if applicable),
  • contractor vs employee status,
  • superannuation and payroll compliance, and
  • any disputes, warnings, or performance management history.

If staff are essential to ongoing operations, think early about retention, incentives, and handover planning.

7. Intellectual Property: Make Sure You Actually Own What You Are Selling

This includes:

  • business names and trading names,
  • domain names and websites,
  • trade marks (registered or unregistered),
  • logos, brand assets, marketing materials,
  • software licences, and
  • business systems and confidential know-how.

Buyers will want comfort that the business can keep using the brand and systems after completion, without risk or interference. If any intellectual property rights sit in your personal name, a related entity, or under a non-transferable licence, you will want to fix that before marketing the business.

8. Compliance and “Hidden” Issues: Fix Them Before a Buyer Finds Them

Depending on your operations, this can include:

  • licences/permits and compliance history,
  • privacy/data handling and cyber arrangements,
  • consumer law compliance and complaints handling,
  • safety and incident records,
  • environmental issues (particularly if land or regulated activities are involved), and
  • litigation or threatened claims.

A buyer’s due diligence is designed to uncover risk. Your preparation as a seller should focus on identifying risk first and deciding how it is best addressed either by remediation, disclosure, or contract allocation.

9. Tax and Structuring: Plan Early to Avoid Expensive Surprises

A sale can trigger tax outcomes (including capital gains tax) that depend on:

  • whether it is an asset sale or share sale,
  • what assets are being sold (and how they are allocated in the purchase price),
  • how long assets have been held,
  • whether any small business concessions might apply, and
  • whether there are losses, divisions, or group structures to consider.

Early tax structuring can materially change your net proceeds. Engage your accountant early and align the commercial deal with the tax strategy, before price and structure are locked in with a buyer.

A Final Word: The Best Time to Prepare Is Before You Find a Buyer

A buyer’s confidence often comes down to one question: “Is this business organised, transparent, and transferable?” If you can answer “yes” with evidence, you improve speed, price, and negotiating leverage when it comes to selling your business.

Speak to MV Law’s Commercial Team

If you are considering selling your business, whether it is a standalone business, a franchise, or a lease-based operation, MV Law’s Commercial lawyers can help you plan the sale process, navigate franchisor and landlord consent requirements, prepare for due diligence, and negotiate a sale contract that protects your position.

Contact us to discuss your proposed sale and the best next steps.

MV Law Canberra

Ph: (02) 6279 4444

Email: info@mvlaw.com.au