The Sale Process

Steps to Selling Your Business

Selling a business is a complex procedure. Whether it’s your first time, or you’re an experienced seller, it’s very easy to forget things and to feel overwhelmed.

While you should always feel comfortable asking questions, the following will give you a better understanding of the process.


Owner interview and data gathering

Whether you are ready to sell today or planning for a future sale, then PLANNING is the key. We sit down and get a clear understanding of the history and the performance of the business and its future prospects. Also we advise on aspects of your business that might hinder the sale and set strategies to fix issues where possible in the given time frames.

Normalise financial statements

When you market your business for sale your tax accounts don’t give a true reflection of the performance of the business. So normalising the accounts for sale purposes involves adjusting the accounts by adding back interest on debt that won’t transfer, one-time non-recurring expenses and to remove benefits accruing to the owner that aren’t related to the actual operation of the business. We recommend that this be completed in conjunction with your accountant so all parties are in agreeance and we can verify these add backs to a new purchaser before the business is marketed.

Provide opinion of market price range

In accordance with our obligations under the REAA 2008 ACT we prepare a simple written appraisal of the business utilising accepted valuation methodologies which includes a market comparison to other similar businesses that have been sold recently. You as the owner are under no obligation to accept our appraised value and we welcome your feedback.

Obtain authority to sell

This agreement authorises Transworld Business Advisors to act on your behalf. It outlines our fee structure and both parties' responsibilities.

Prepare business information memorandum (IM)

This document will eventually be released to qualified buyers and their advisors who have completed a confidentiality agreement. It is very important that it is a true representation of your business. It provides preliminary information on your business enabling purchasers to determine whether it fits their buying criteria. We prepare the IM on your behalf and it is signed off as true and correct by you before it is released to the market. This document is not expected to sell the business but gives a potential purchaser enough information to get an understanding of the business and to then if interested request more in-depth information.


Implement marketing programme

Any marketing that is undertaken will not identify your business (unless agreed upon). TWBA uses a multi-faceted approach, with our database of qualified buyers being our first port of call. As standard we market via our website,,, and facebook and LinkedIn if the business suits those channels.

Screen response

Initial discussion with interested parties to ascertain whether the business fits their buying criteria, fits their budget and we try to ascertain whether the buyer is a real buyer rather than a looker.

Obtain confidentiality undertaking

This is obtained from all purchasers before we reveal any information that could identify your business.

Qualify buyers

We continue the process of ensuring that the buyer has the financial resource, business experience and commitment to complete the transaction. New Zealand is a small country and brokers get to know the buyers that are genuine and conversely those that aren’t.

Present information memorandum

The purchaser is provided with the IM (which you have previously signed off on). This can either be at a face to face meeting, via a video-conference call or if it is a buyer we have experience with via email.

Determine buyer interest

Once the purchaser has studied the IM we follow up to ascertain whether they have any interest in pursuing the business purchase further.


Vendor-Purchaser meeting

The V-P meeting is an important step in the process because it allows the buyer to hear the owner’s story directly and gives the buyer a better understanding of the owners personality and motivations. We generally have this meeting outside of the office, so as not to disrupt the business. If a site visit is required this is usually arranged after hours if the owner feels that the staff could grow suspicious with the owner walking around with different people throughout the process.

Provide further business details

As a result of the initial meeting, the purchaser will have a list of questions to be answered. We will pass these on to you when/if required.

Negotiate offer from purchaser

This will generally be in writing as a Sale and Purchase Agreement or a Heads of Agreement. The agreement sets out all the terms and conditions of the offer and will always be dependent on the purchaser completing due diligence to their satisfaction. In most cases we try to have more than one purchaser proceed to offer stage. This triggers a multiple-offer process and allows the owner the choice of the buyer who he/she considers most likely complete the transaction.

Facilitate negotiations

TWBA will lead the negotiations on your behalf to ensure you receive a premium price for your business. You will be advised to seek the relevant legal and accounting advice from your other advisors.

Complete sale and purchase agreement

Once both parties have signed the contract there are now various conditions that need to be satisfied.


Assist in satisfying conditions

The contract is usually conditional on due diligence, finance and if a lease is involved, upon obtaining the landlord’s consent for the assignment of the lease. TWBA is involved in all steps of this process and will liaise with your professional advisors, and those for the buyer, to ensure that all conditions have been satisfied.

Due Diligence

Due diligence is the process where the purchaser along with their accountants and solicitors will examine the business in more detail. This usually involves an audit of the company’s financial and non-financial position and performance. Until this stage most of the information provided has been accepted on its face value and now the purchaser would like it verified. This process normally takes between 15 to 20 working days depending upon the complexity of the business and also on the ease in which information is made available. TWBA works closely with all parties to facilitate this process, ensuring that any confidential information is protected and that the day-to-day operation of the business is not disrupted.


Confirm unconditional

The contract is usually declared unconditional in writing by the purchaser’s solicitor, and both parties must honour the agreed transaction.

Deposit into trust account

Once the contract is declared unconditional, TWBA will ensure the deposit is paid into their audited NZ Real Estate Trust account and be dispersed according to the relevant law.

Settled sale

During the period between when the contract is declared unconditional and possession takes place, both parties and their accountants and solicitors will attend to any financial and legal requirements that need to be finalised. A stock take, (if stock is a component of the business), is usually completed before settlement and the settlement sum adjusted to reflect the value of stock (stock is calculated at cost price with any adjustment made for old and obsolete stock).

Seller’s assistance

The Vendor will generally be required to assist the new owner in the running of the business for an agreed period of time (usually up to four weeks), payment for this period is included in the purchase price. If assistance is negotiated beyond this period it is at an agreed rate of compensation and accounted for in the negotiations of the Sale and Purchase Agreement.


To a first time seller the above process can be overwhelming without the assistance of an experience broker, however we have been involved in hundreds of successful sale transactions and are able to guide you through the process.