How to prepare your business for sale (and protect its value)
Date: 21 October 2026
Authors: Zahara Bedewi-Hayes - Genuine People
In this series, we've been busy getting our readers' ducks in a row for a successful business sale; from keeping a clean PPSR profile to tidying up IP registers. But in our enthusiasm for the specifics, we've skipped over the bigger picture question of why sale-readiness matters so much in the first place.
Preparing for the unexpected
A business sale is not always planned. It can be triggered by an unexpectedly attractive offer, a falling out with business partners, illness, or another unforeseen event.
When that unexpected happens, it is often too late to fix the things that quietly erode value.
Business owners are faced with less-than-ideal offers, or worse, the attractive offer that drops and maybe drops again, as unfixed issues emerge.
Business owners who assume they'll have years of runway to get their house in order before selling are taking a real risk. The businesses that come out ahead are the ones that treat sale-readiness as a constant state, not a project to start once a buyer is already at the table.
Separating yourself from the business
We've seen it and we get it: the time, effort, sweat and tears that go into building up a business. Unfortunately, the harsh reality is that sometimes the biggest hindrance to the sale of a private business is its owner. But don't get disheartened just yet, let us explain.
Buyers need confidence that the business can continue to succeed after purchase, without the owner/founder, and buyers actively look for businesses that can continue post-sale.
The predicament is that client relationships, goodwill, and culture often sit with the person who built the business and can be almost inseparable from them.
Untangling that dependency can be difficult, particularly for smaller businesses where the owner is the face of every client (and key supplier) relationship and the source of most institutional knowledge.
This isn't something business owners can fix between an offer landing and the weeks before settlement. It takes time to delegate decisions, document processes, embed a system, build a management layer, and let key relationships transfer to the business itself rather than staying tied to the owner personally.
The earlier this work starts, the more genuine separation business owners can achieve, and the more confidence a buyer will have in the business's ability to thrive without them. This can strengthen buyer confidence and improve the seller's negotiating position.
What does a sale-ready business look like?
This will depend on the size of the business, its industry and whether the proposed transaction is structured as a sale of shares or a sale of assets. At a minimum, sale-readiness means having:
- key customer and supplier contracts, and property leases signed up and not about to expire;
- systems, so the business has an operation separate from the owner;
- complete and up-to-date financial statements prepared to standards expected by a sophisticated buyer (ideally audited);
- a current and easily divested corporate structure;
- a comprehensive suite of financial and tax records;
- clean corporate filings and registers;
- properly documented employee contracts and compliance;
- clear IP and domain name ownership sitting with the business;
- a clean PPSR profile;
- a clear picture of litigation status; and
- other regulatory risks identified, including privacy, cyber security, licences and permits, and evidence of a systematic approach to addressing these.
A buyer's due diligence can potentially end a transaction. More often, it changes the risk allocation. A buyer may seek a price reduction, additional warranties, a specific indemnity, retention of (or a larger retention of) part of the purchase price, an earn-out, a condition that must be satisfied before completion or a longer handover from the owner.
Identifying and addressing those matters that could be problematic for a buyer before negotiations begin gives the seller more options. Discovering them after a buyer has exclusivity usually gives the buyer more leverage.
Being sale-ready is not just about attractiveness to buyers
The good news is that the operations needed to maintain a sale-ready business are also those that help it run smoothly day-to-day.
Maintaining clear records, documented contracts, and organised processes are simply healthy business habits to have, regardless of whether a sale is on the horizon.
Sale-readiness isn't only about presenting well to a buyer; it's about running a business that is easier to manage, easier to hand over in a crisis, and better positioned to seize opportunities as they arise.
Does sale-readiness differ between an asset sale and a share sale?
Yes. In an asset sale, the buyer acquires selected assets and business operations. Contracts, employees, intellectual property, leases, and other assets will each be subject to a different transfer process. For example, contracts may require consent of the other party to transfer; employees will need to receive and accept a new offer of employment.
In a share sale, the buyer acquires the company itself, with all rights, obligations and historical liabilities included. So, due diligence tends to go deeper, with closer scrutiny of the company's corporate, financial, taxation, employment, regulatory and dispute history.
The takeaway
A business owner has greater options when weaknesses are identified before a sale process begins. Contracts can be renegotiated, ownership records corrected, systems documented and risks addressed without the pressure of an exclusivity period or approaching completion date.
Hunt & Hunt advises business owners on sale-readiness, transaction structuring, due diligence and the negotiation of business and share sale agreements. If you are considering a sale, responding to an unexpected offer or simply want to understand how best to get your house in order, contact Zahara Bedewi-Hayes or Nick Miller on 1300 486 800.
Frequently asked questions about preparing a business for sale
A business which is capable of operating without extensive involvement from its owner is more valuable to a buyer.
As well, a business that has well-maintained records and proper financial information, and is able to readily demonstrate that to buyers, will also be more attractive.
Ideally, from the moment the business is established, as this will instil a perspective that emphasises that the best opportunity comes to those who are well prepared, having regard to what sale-readiness means.
If there is preparation to be done, then some aspects of that (e.g. reducing owner dependence, potentially a restructure and, as a final example, having in place signed contracts with a decent remaining term) can take quite some time – 12, 18, 24 months or more.
If a business is held together by the "sticky tape" of the owner's knowledge and relationships, then it will be a lot less valuable to anyone else who isn't that owner.
It is always a spectrum, but owner dependence can lead to a very materially reduced price, a larger portion of the consideration tied to a (potentially long) earn-out and/or an extended handover during which the owner is obliged to remain in the business.
The more a business can demonstrate (including through documented processes and the capabilities of its management team) that it is not owner-dependent, the more valuable it will be.
This will depend upon whether an asset or share transfer is proposed, how long the business has been established, its size, complexity and other factors.
All buyers will want to see several years of financial statements, material contracts, employment contracts and a summary schedule, property leases, a listing of plant and equipment and intellectual property, and information about any recent disputes.
No. But if they have been audited for a couple of years by a reputable accounting firm, that will enhance seller credibility and so build buyer confidence.
Consistency of accounting policies is important, again for seller credibility reasons. Almost invariably, recent financial statements should be "normalised", so that related party (etc.) transactions are removed to demonstrate what the business would look like in the hands of a new owner.
This will depend upon the size of the problem, how it can be fixed and by whom. So there is a range of possibilities, including transaction delay, price renegotiation, inclusion of an earn-out, adding a condition precedent to completion (i.e. that the problem be fixed before the sale goes through), including a specific indemnity in the sale documentation, or adding (or increasing) the amount of any retention from the proceeds that would otherwise be paid to the seller on completion.
Definitely yes, as it reduces buyer uncertainty and risk, builds buyer confidence and also strengthens the seller's negotiating position.
Your accountants and lawyers can help you from the outset to make sure your business is sale-ready.
It is also worthwhile engaging with corporate advisers who may point to strategies which enable you to maximise sale proceeds, including potentially the most likely types of possible buyers, and what they will focus on.
Importantly, you should also obtain tax advice both as you prepare and then close in on a sale transaction.
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