How to sell a trades business in Australia

Start with the question a buyer asks first

A buyer wants to know one thing before anything else: what happens when you leave? If the answer is "the phone stops ringing", the business is hard to sell, or it sells for less.

So the first step is not finding a buyer. It is making the business run without you.

The steps, in order

1. Decide what you want next. Keep it under a manager, sell to your team, or sell to an outside buyer.
2. Find where it depends on you. Score the Nine Keys and list the work only you do.
3. Fix the flat spots. Usually Systems, Administration and a second in charge.
4. Clean up the records. Books, contracts, licences, leases and logins in the company name.
5. Get a rough idea of value. A rough guide, not a valuation.
6. Talk to your accountant about tax and structure before talks start.
7. Bring in a broker or lawyer to run the sale and the contract.
8. Hand over. Plan the handover period with the buyer.

Trade licences and the key-person problem

Many trade businesses run on the owner's licence. If the licence leaves with you, a buyer has a problem. Licence rules differ by state and trade, so check yours early.

A nominee or second licence holder in the team can make the business easier to sell. Ask your lawyer and the regulator what applies to you.

What makes a trades business easier to sell

• Work comes in without your name or phone number
• A manager or leading hand runs the jobs
• Quoting and pricing are written down
• Customers and repeat work belong to the business
• Clean books that show profit after a fair wage for your own work

How long it takes

For most owners, the work to get ready takes years, not weeks. Start 2 to 5 years before you want to step back. Selling under pressure usually means fewer choices.

Questions owners ask

How do you sell a trades business?

Make it run without you first. Then clean up the records, get a rough guide to value, talk to your accountant, and use a broker or lawyer to run the sale.

Can I sell a business that runs on my licence?

It is harder. A buyer needs someone licensed to keep the work going. Check the rules for your state and trade with the regulator and your lawyer.

Do I need a business broker?

For an outside sale, most owners use one. I am not a broker. I help get the business ready and work alongside yours.