Morgan Business Sales is a national brokerage firm. We sell businesses of all shapes and sizes around Australia, including in Perth and throughout Western Australia. Get the power of a national firm and the expertise of a local commercial sale agent.
The exact process you would go through to sell your business in Perth depends on the size of it, the industry you’re in and how much time you have for the sales process. However in most circumstances, the sales journey typically goes as follows:
1 – Engage a professional to determine your businesses market value
We recommend determining how much your business is worth as the first step. Armed with this number you can then make a decision on how you would like to proceed. If the number is not high enough for your plans like retirement or buying another business or asset, you may decide to hold off selling for the time being. Working on your business until it’s at a point that would work you for you. You may choose to engage a professional Exit Advisor to assist in this value building process.
If the number is something that would work for you, you can then move on to the next step in the sales process.
We recommend using a professional such as accountant, a business broker or a business valuer to complete the appraisal for your business. The process will include sharing your recent financial statements for analysis and answering a few questions about your company. Costs are typically $1,000 – $6,000 depending on the complexity of your company. You can expect to get a report back in 7 – 30 days again depending on how complex your business structure is.
2 – Decide how you would like to go to market
If your market value is a number or range that would work for you, the next thing to do is determine how you’re going to go to market. You have a few options here.
One, you could directly approach someone you think may be interested in purchasing your business. This may be an employee or a competitor that you think may have some interest or someone who has approached you about selling previously.
Two, you could decide to go to the open market, representing yourself as ‘For Sale By Owner’ across platforms like Facebook Marketplace or Gumtree. The benefit of this approach is less direct costs in that you don’t have to pay a professional like a Perth Business Broker any commission. However the downside is your time and indirect costs. Despite not paying sales commission, you may end up worse off overall than if you had engaged a sales professional who could maximise your sales price.
The third option is to engage a professional business broker like us at Morgan Business Sales to manage the sales process for you. The downside here is you will have to pay for the brokers services. However we consider what we do for a seller as cost positive. We get owners more money in their pocket even with our fees than if they had represented themselves. This comes from the additional buyers we’re able to attract and our ability to negotiate the price up.
3 – Prepare your business for sale
No matter which path you go down, your business will need to be organised so it’s ready to be transferred to a new owner. And you will need to package all of your information into a document so that a prospective buyer can better understand what you’re doing.
How detailed this needs to be depends on the buyers you think will be interested in your business. We do however always recommend to put as much effort as possible into this preparation. The least amount of friction required for someone to assess and take ownership of your business the better.
4 – Take your business to market
Now you have a strategy and a neatly packaged business ready to show to prospective buyers, the next step is to get it in front of them. How you do this will depend on your strategy. It may mean contacting a competitor directly for a chat, posting an advertisement on Gumtree or working with a business broker to get your business on the major ‘business for sale’ platforms like Seek Business, Commercial Real Estate and Bsale.
Buyers of businesses tend to fall into three categories. Individuals, industry buyers and private equity firms. The most likely buyer typically depends on the size of your business. If it’s worth less than $500k for example, the most likely buyer will be an individual. If it’s worth $2m+ it’s most likely to be an industry buyer. We recommend writing any advertisements with the buyer type in mind to give yourself the best chance possible to at getting their interest.
If you do get any enquiries, we highly recommend getting interesting parties to complete a confidentiality agreement (CA) before you release to them any sensitive information like tax returns. The last thing you want is your competition and/or staff to get access to important company data.
5 – Negotiate and accept the best offer
Ideally after you’ve gone to market, answered follow up questions from interested parties, conducted inspections if applicable you will receive offers for the sale of your business. The best case scenario being you receive multiple offers at around the same time so you can compare them.
The offers you receive will differ in their structure. They will have different prices, different time frames, some may request that you provide some finance (known as vendor finance), some will want you to continue to work in the business for a period of time. You will need to determine the best deal structure for your future plans. Keeping in mind that the highest price may not be the best offer.
A business broker, accountant or legal professional can be a great person to chat with at this stage to help you work through the and determine the most suitable offer.
Once you have decided on the one you like the most, we recommend going back to prospective buyer to negotiate further. Very rarely is their first offer their best offer. After some back and forth you will hopefully reach a mutually beneficial agreement and can accept the revised offer.
6 – Assist in due diligence
Commonly after an offer is accepted, the buyer will pay a deposit (typically 10% of the sale price) and then conduct a due diligence process to make sure everything you said about your business stacks up. Similar to a pest and building inspection when purchasing a house.
The most regular things to come under the microscope during due diligence are financials and legal agreements. The larger the business, the longer and more detailed this process is.
7 – Exchange contracts and settle
If both parties are happy after the due diligence process, a business can move to the legally binding exchanging of contracts. This is typically completed by the legal representatives of each of the clients.
You as the buyer will then receive the upfront money you accepted in your deal structure and can begin the transfer of the business and your role in whichever way you agreed upon. This may be shaking hands and walking away on the day, staying in for a period to help in the transition or staying in for a longer time to continue to play a role in the business. Either way you have successfully sold your business in Perth, well done!
A business broker is a professional who acts as an intermediary between buyers and sellers of businesses. They link business opportunities with investors. Business brokers typically work with small and medium-sized businesses, and help owners who want to sell their business by finding potential buyers and facilitating the sale process.
Business brokers often work with business owners to help them determine the value of their business, develop a marketing plan to attract potential buyers, and negotiate with buyers to ensure that the sale is completed on favourable terms. They may also provide guidance on financing options and other issues related to the sale.
In addition to working with sellers, business brokers may also work with buyers who are interested in purchasing a business. They can help buyers identify businesses that meet their criteria, provide information about the businesses and the industry, and assist with the due diligence process.
There are several reasons why people may choose to use a business broker to sell their business rather than selling it themselves.
Business brokers typically get paid a commission on the successful sale of a business. The commission is usually a percentage of the final sale price of the business and is negotiated between the broker and the business owner prior to starting the sales process.
The commission percentage can vary depending on the size and complexity of the business being sold, the level of service provided by the broker, and the geographic location of the business. In general, the commission can range from 5% to 10% of the final sale price of the business.
In addition to the commission, some brokers may also charge additional fees for their services, such as advertising and marketing expenses, legal and accounting fees, or other expenses related to the sale of the business. These fees are typically negotiated separately from the commission and should be clearly outlined in the broker’s contract with the business owner.
It’s important for business owners to carefully review and understand the terms of their agreement with a broker before proceeding with the sale of their business, including the commission rate and any additional fees or expenses.
There are several methods for valuing a business, including:
Ultimately, the appropriate method for valuing a business will depend on the specific circumstances of the company, and a combination of methods may be used to arrive at a final value.
When it comes to selling a business, you have a number of options. You could sell it yourself or choose from a selection of professional Perth business brokers. So why should you choose Morgan Business Sales? These are the reasons we most commonly hear from clients who come to us from a competitor:
Unfortunately there’s no straight answer. We’ve had businesses go under contract within a day. And other listings take two years to sell.
In our experience, the two major determining factors are the price (fair vs overpriced) and the amount of buyer demand in the given industry.
Please book in a free consultation here if you would like an understanding of how businesses like yours have been performing recently in the market.
Our listings get published to all of Australia’s largest business for sale directories (Seek, Commercial Real Estate, Bsale etc).
In addition we promote businesses on our website, on social media (Google, Facebook, Instagram, LinkedIn) and to our email list of 30,000+ qualified buyers.
For larger businesses, we also conduct a direct marketing campaign to national and international groups who have the potential to be a great fit.
No. We market businesses in such as way as that they remain anonymous. We act confidentially in all dealings.
In short, yes, we’re fully licensed to sell businesses in Perth.
In Australia, licensing of business brokers varies by state, with some states requiring licenses, some not; and some requiring licenses if the broker is commissioned but not requiring a license if the broker works on an hourly fee basis.
State rules also vary about recognising licensees across state lines, especially for interstate types of businesses like national franchises.
Some states, require either a broker license or law license to even advise a business owner on issues of sale, terms of sale, or introduction of a buyer to a seller for a fee.
All Australian States require a real estate license in order to commence a career in Business Broking. According to a recent Australian Business Broking convention at least 6 states and two territories required business brokers to have a real estate license.
The following states require a license to practice as a business broker: Victoria, Tasmania, South Australia, Western Australia, New South Wales and Queensland. Territories in Australia requiring a licence are the Australian Capital Territory and the Northern Territory.