May 7, 2019

Multi-disciplinary advice for business owners: #2 FIVE essentials when preparing your business for sale

Open mine pit

After years of dedication and hard work, you deserve to realise the full value of your business upon its sale. You also deserve to maximise your retirement savings.

To achieve both outcomes, questions concerning your preferred exit option, business value, tax and CGT implications and what type of buyer you should attract will all need to be considered. The answers are often complex. But one thing is for sure, to avoid making the mistake of assuming the sale of your business will fund your retirement lifestyle, you will need to consider these FIVE essentials when preparing your business for sale:

1. Type of business exit

For tax and/or risk reasons, selecting the business sale method most likely to realise the optimum value for your business may depend on your current business structure. The options include a share sale or asset sale; a trade sale to a firm within your business sector; listing as an initial public offering (IPO); a management buy-in; a staged approach or an immediate sale.

2. Understanding the business value

If you have an accurate assessment of the current business value and a thorough understanding of your financial reports, you’ll understand any ‘value gap’. The value gap is the difference between the current value of your business and what you need it to be at the time of sale, and should take into account factors that may include employee entitlements. If the gap is significant, it could prevent you from selling; or if you do you may need to accept a lower sale price and in turn, retirement lifestyle of a reduced standard.

3. Capital gains tax (CGT) and income tax

Each business sale option will have CGT and income tax implications which need to be understood. The small business CGT retirement concession may minimise the tax consequences of the sale. Similarly, contributing to superannuation may also form part of a tax effective strategy.

4. Information and documentation

During due diligence a buyer will require specific information and you may also need to prepare relevant documentation such as financial reporting. The more accurately these are prepared, the more impressed buyers will be. Legal advice may be required to ensure that specific clauses are included in a sale contract to ensure that you can extract the full value entitlement.

5. Integrated, multi-disciplinary advice

Qualified advice across a range of disciplines – financial planning, law, tax and accounting and property – will contribute to outcomes when selling your business. Taking a team approach where each of these specialist advisors work together with your common goal in mind, will mean significant expertise can be applied to your business sale so that it progresses smoothly, and so too, the distribution of funds upon settlement for funding your lifestyle or retirement plan.

Each of these professionals has a clear role to play in your business. For example, the sale of your business will have significant implications on your personal financial plan; a legal expert will decipher often complex documentation or prepare required disclosures when presenting your business for sale; and if your retirement plans include changing property ownership, you will need an experienced property advocate with an understanding of your circumstances to guide your property decisions. And of course, you will need tax and business advice to support your decision making andminimise tax, now at the time of sale, and in the future.

No single professional is qualified or specialised across all disciplines to provide the advice and help you require. The solution is collaboration.

Resources Unearthed was founded to address this very real need. Together, the specialised contributions to Resources Unearthed form an information hub that allows executives, professionals and business owners in mining and resources to easily access specialised financial, business, legal and property services, among others. The second important aspect of this hub is access to a highly qualified central coordinator who identifies your advice needs and coordinates the necessary services for you.

Your next step

Please take a moment now to view this important strategy paper: ‘Business Sold. Value Extracted. Future Assured!’. Written specifically for business owners in mining and resources, the paper outlines the complexities involved when a small business that has grown significantly needs to protect assets and realise the full value of the business upon its sale.

To find out more selling your business smoothly and effectively to achieve the outcomes you want, please contact Resources Unearthed on +61 (0)7 3007 2000 or


Multi-disciplinary Advice for Business Owners in Mining & Resources

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Resources Unearthed is a solutions hub that provides integrated financial, legal, property and accounting & business advisory services for executives, professionals and business owners in mining and resources.

The information contained here is general and not intended to serve as advice. Any information supplied is not a substitute for independent professional advice. We do not warrant the accuracy, reliability, completeness or adequacy of the information or material. All information is subject to change without notice. 


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