Sales Jargon

 

Sale and Purchase Agreement 

A standard contract that is approved by the Auckland District Law Society and Real Estate Institute. This agreement sets out all the terms and conditions that are relevant to the sale of your business. We will prepare this document with assistance from your solicitor and the buyer’s solicitor.

 

Due Diligence 

Once an offer has been accepted, the Purchaser will have a period of time to have a close look at your business. This very generally includes the lease, business accounts, GST returns, employment contracts, customer contracts, business operations and anything else the buyer deems as necessary. The time allowed for this depends entirely of the size/complexity of the business but generally it is 10 to 20 working days.

 

Unconditional 

This occurs when all conditions of the contract have been met and your solicitor has signed this off. 

 

Settlement

The buyer usually pays a deposit upon signing the agreement. This deposit is released upon unconditional date and the buyer pays the balance of the Purchase price on settlement date before taking possession of the business. If there is stock involved in the sale then a proportion of the settlement funds are generally held back until a stock price is agreed upon.

 

Be prepared to train a new owner 

The period of training will depend entirely on the complexity of your business.

 

Vendor’s period of Assistance

You as the business seller are usually required to assist the buyer for an agreed period to ensure a smooth transition. Payment for this is included in the sales price; however should this be for an extended term, say 3 months or more, then a salary should be negotiated and be included in the Sale & Purchase agreement. 

 

Intangible Assets

These assets are a business resource and provide future productivity benefits. They are nonphysical or financial and can best be described in 3 categories: 

 

Intellectual Property 

The intellectual property/ assets of a business, along with other intangible components of its work environment such as systems and processes, trademarks, trade names, customer lists etc. 

 

Rights 

Rights are agreements and contracts that a business has with other separate identities e.g. Franchise agreements, Supply contracts, Customer contracts etc. 

 

Relationships 

Relationships are the skills, competencies and knowledge of the workforce applied to productivity and enhancing the business. It is also relationships with both customers and distributors. Grouped Intangibles is that the business is successfully trading as a going concern. Goodwill is a combined term for the above. 

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  • Alan from Barker Business was the best thing that happened to us! — Cameron Holm.

  • I have found Barker Business Brokers to be a highly professional and innovative company. Their dedicated team of more than 10 experienced and energetic brokers impressed me immensely. — Brian Douglas.

  • Alan is a very genuine businessman. We were kept well informed throughout the whole process. His communication was prompt and professional, and he works with integrity. — Robert Marson.

  • Brett expertly picked the correct purchasers out of many, and an offer was made in two days after going on the market. Four weeks later the business was sold. — Karen Franklin.

 

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