So, you are ready to take the huge step of selling your business – but did you know that it isn’t always as easy as simply signing off on a sale contract?
Many first-time sellers overlook a few important details when looking to sell their business – these oversights can be expensive! Don’t decrease the value of your business that you have worked hard to build by making mistakes that can be easily prevented!
1. Know what your employee entitlements are.
With the excitement of selling your business, employee entitlements such as annual leave, long service leave and sick leave, can be easily overlooked. If you do not consider employee entitlements when you determine your sale price, then it could be deducted from your purchase price – this can be an expensive mistake.
Take-away: Ensure that you take employee entitlements into account before determining your purchase price (or risk being out of pocket!)
2. Don’t assume you can assign your lease.
Generally, you will need your landlord’s consent to assign the lease to your business purchaser. There is a formal process at law and usually under the lease that must be followed. If you sell the business and have not obtained landlord consent (if its required) you risk breaching your lease and being liable for damages.
Don’t be caught out in the middle of your sale by a non-consenting Landlord! It is a pre-condition in some Retail Lease Acts and lease agreements that you not only obtain consent, but also that you leave enough time and notice to negotiate.
Take-away: Read your lease agreement to make sure that you are complying with the process for assignment.
3. Check your client and supplier contracts.
You may find that your clients and suppliers have a non-assignment clause in their contract with you. Often this will require that you seek their consent prior to selling your business. Not going through this process could result in a customer or supplier terminating their contract and directly affecting the profitability of the business – and in some cases putting a halt to your business sale.
Take-away: Review your client and supplier contracts.
Gladwin Legal can assist you in the sale of your business to make sure that you avoid costly mistakes like the ones above, and more. For an obligation-free chat, contact us on or 1300 033 934.