Selling Your Business: Prepare Early
Thinking about selling your business? The difference between a smooth, high-value sale and a frustrating one often comes down to preparation.
Buyers aren’t just purchasing profits. They’re buying certainty, structure, and the ability to step in with minimal disruption. Early planning with both your Accountant and Lawyer can make a significant difference to value, timing, and avoiding unnecessary issues during the sale process. Many avoidable issues ultimately result in price reductions or delays that could have been prevented with proper preparation.
At Checketts McKay Law, we regularly assist business owners to identify and resolve legal risks before going to market, helping position businesses for a smoother transaction and stronger buyer confidence.
What in Your Business Actually Creates Value?
Value isn’t just about revenue - it’s about how reliable and transferable the business assets are, both tangible and intangible.
A business with documented systems, clear processes, and strong contractual arrangements is generally more attractive than one where key knowledge sits only with the owner. Buyers want confidence the business can continue operating successfully after settlement.
It’s also important to identify the unique aspects of the business that create value, such as:
- Custom software or specialised systems
- Intellectual property or branding
- Licences or regulatory approvals
- Key supplier or customer arrangements
If these features are central to the business, they should be properly documented, transferable, and protected.
Checketts McKay Law can assist with reviewing ownership structures, intellectual property protections, and contractual arrangements to ensure these valuable assets are properly secured before sale discussions begin.
Records and Documentation Matter
Buyers will review your records carefully, and gaps in documentation can quickly reduce confidence.
Make sure financial records are current and organised, including:
- Financial statements
- Tax and GST records
- Asset registers
Operational records are equally important. Employment agreements, supplier contracts or terms of trade, lease documentation, and health and safety records all help demonstrate that the business is professionally managed.
We often help clients identify missing or outdated legal documentation early in the process so issues can be addressed before due diligence begins. This can significantly reduce stress, delays, and renegotiations later on.
Contracts, Leases, and Third-Party Risk
In our experience, one of the most common issues in business sales is key arrangements being outdated, undocumented, or dependent on third-party approval.
Customer contracts, supply arrangements, and commercial leases often involve parties outside your control. Even once a buyer is ready to proceed, those third parties can delay — or sometimes upset — the transaction altogether.
Key contracts should be reviewed early to confirm they are current, enforceable, and able to be transferred if required.
The same applies to leases. In many businesses, the premises location is a major part of the goodwill and value being sold, so the lease position needs to be watertight. Clear records of lease renewals and rent reviews help.
In most cases, landlord consent will be required before a lease can be assigned to a buyer. Delays or uncertainty around the lease can create issues at exactly the wrong time, which is why these matters should be addressed well before going to market.
Checketts McKay Law can assist by reviewing leases, identifying consent requirements, and helping manage communications with landlords and other third parties to minimise disruption during the sale process.
Think Carefully About What Is Being Sold
Many owners have not fully considered what is included in the sale and what they intend to retain.
For example:
- Is there a vehicle or equipment you want to keep?
- Will stock be included in the purchase price?
- Will you assist with handover and training after settlement?
- Do you intend to remain in the same industry or are you retiring?
Working through these issues early helps avoid misunderstandings later.
We can help clarify the scope of the sale, document agreed terms clearly, and ensure expectations are aligned before negotiations progress too far.
Employee and Handover Planning
Employee continuity is often critical to a successful transition.
It’s important to allow enough time to manage communications with employees and transfer knowledge appropriately. Typically, employment agreements are formally ended and new agreements entered into, so the correct processes under employment law should be followed. It is not a given that employees automatically continue employment with the buyer. In some cases, employees may also have protections under employment law requiring their employment to transfer to a buyer.
A well-planned handover can reduce disruption for both the buyer and the business itself.
Checketts McKay Law can provide guidance on employee transition obligations, restructuring considerations, restraint provisions, and handover arrangements to help minimise legal risk during the transition period.
Final Thoughts
Preparing a business for sale is ultimately about reducing uncertainty. The more organised, documented, transferable, and protected the business is, the easier it is for a buyer to recognise its value.
Starting early also gives you time to address issues involving landlords, suppliers, employees, and other third parties before a transaction is under pressure.
Your trusted advisors at Checketts McKay Law can help you identify legal issues early, strengthen the value of your business, and guide you through the sale process from preparation to settlement.
Talk to us today about a legal “health check” before your business hits the market.
By Aaron Dykes, Senior Associate