How to sell a business in New Zealand: an owner's guide

On this page

1. Timing and your team
2. What it's worth, roughly
3. The eight tests
4. Who buys businesses like yours
5. The team and who pays whom
6. What actually happens
7. Where the price gets lost
8. Tax, briefly
9. If you're planning to sell

Before listing: decide your timing and your team

Most guides to selling a business in New Zealand start at "choose a broker". Preparation can usefully begin much earlier. Two decisions shape it early: when you want to sell and who helps you prepare.

The first is timing. With six to twelve months available, choose the issues you can realistically fix, disclose or price in before listing. Some changes need longer; recognise those early rather than promise they can be completed inside a short programme. Preparation gives you more information and options; it does not guarantee a higher sale price.

The second is who you take advice from, and how they're paid. A broker's commission, marketing costs and payment triggers should be agreed in writing. Your accountant and lawyer agree their own scope and fees with you; the buyer appoints their own advisers. Preparation works best when responsibilities and the supporting information are clear.

What your business is worth, roughly, and why it's a range

For an established, profitable operating business, maintainable earnings multiplied by an assumed multiple can be a useful starting point. The earnings definition, owner replacement cost, assets included and transaction terms all matter. Asset-heavy, loss-making or unusual businesses may need another approach. Read the NZ business value guide before comparing figures.

So the honest answer to "what's it worth" is a range, with a clear account of what pushes you to the top of it. A single number hides the assumptions that matter most. I've written more on how the range is built.

Eight areas buyers commonly examine

The scope and order of due diligence depend on the buyer and the business. I score every business on them before a buyer does:

1. Owner dependence: does it run for a month without you?
2. Earnings quality: will a buyer's accountant accept the number?
3. Lease: can the premises transfer with suitable tenure?
4. Staff: are the people on paper?
5. Systems: could a new owner run it from the manual?
6. Customer concentration: where is revenue concentrated across customers, channels and markets?
7. Compliance: is everything current, and in the right name?
8. Growth story: does the trading history support the opportunity?

Earnings and owner dependence can be significant issues; a credible growth story may also affect what a buyer is willing to pay. The eight tests in full.

Who buys businesses like yours

In this band there are five useful buyer profiles, and they pay differently for the same business.

• The owner-operator, buying a business they intend to run. Prepare the earnings, operating role, premises and handover assumptions.
• The manager moving into ownership, bringing management experience to a new business. Explain the sector, systems, responsibilities and funding requirements.
• The trade buyer, a competitor or adjacent business. May value customers, staff or capabilities it can add to its existing business.
• The roll-up or small private equity buyer, consolidating a sector. Often examines documentation and management depth closely; unclear records can make due diligence harder.
• The management buyout, involving the existing team. Management capability, affordability, funding and transaction structure need careful examination.

In tourism and trades, trade buyers and acquisition groups may be worth considering alongside owner-operators. The right preparation depends on who is likely to be interested and why.

The team, and who pays whom

A business sale in New Zealand usually involves four professionals, and it's worth being clear about each.

A licensed business broker markets the business, finds the buyer and negotiates. Check the broker's licence and agree the commission and other costs in writing. The Real Estate Authority explains how to check a licence. Ask any broker you are considering how their fee is structured and what it assumes.

Your accountant prepares the financials, defends the add-backs and advises on tax and structure. Your lawyer handles the sale and purchase agreement, the lease assignment, employment transfers and the warranties you'll be asked to give. Agree their scope and fees directly with them.

Sell-side preparation, which is what I do, sits before all three. It is paid by the owner for advisory work. No fee is linked to a sale, its timing or its price. My work ends at hand-over to a licensed broker; I do not communicate with buyers or answer their due-diligence questions. Not every owner needs it. For an urgent sale, a broker may be the best first call; owners with more time can assess whether preparation support would help.

What actually happens, from decision to money

1. Planning to sell in 6–12 months

   Establish the value assumptions and preparation gaps. Prioritise material issues by the evidence, effort and time needed. The 6–12 month preparation plan breaks down this stage.

2. During the scoped preparation

   Build the data room: three years' financials, management accounts, every contract, lease, consents, org chart, operations manual. Choose and appoint your licensed broker. If you use the Exit Programme, Rodara prepares the briefing pack and hands over; the broker then handles the sale.

3. Listing

   The broker prepares the information memorandum and agrees how the business will be marketed and how prospective buyers will be qualified. Enquiry volume and time on market vary; neither is a promise of a sale.

4. Offer and due diligence

   The buyer and their advisers investigate the information and the agreed transaction. The sale agreement sets the conditions and deadlines. Unanswered questions can affect price, terms or whether the buyer proceeds. Preparing the seller's evidence helps your advisers respond.

5. Unconditional to settlement

   The parties complete the remaining contractual requirements. Your lawyer and broker coordinate the applicable consents, finance and settlement steps. Allow time for third-party processes and keep the business performing.

6. Transition

   The parties agree the seller's role, responsibilities and duration with their advisers. The practical handover needs to match the business and the agreement; Rodara's engagement has already ended at the earlier broker hand-over.

Where the price gets lost

My own sales and informal conversations with other owners have made four areas worth examining early.

Unsupported earnings adjustments. A recurring cost labelled as a one-off, an unrealistic replacement salary or related-party rent about to change can alter the earnings basis. The effect on value depends on the multiple and transaction assumptions. Preparing the add-backs schedule.

Customer concentration discovered in due diligence rather than explained up front. What the number does to a multiple.

The owner in every process. The IM says the business runs itself; the diary says otherwise. The owner's diary test.

Unresolved sale conditions. Lease consents, operating permissions and supplier change-of-control terms can affect timing or whether the transaction can proceed. Find the requirements early and ask the appropriate advisers what must be resolved.

Tax, briefly, and why your accountant goes first

Tax treatment depends on the transaction, the assets and the allocation of the price. Ask your accountant about the structure before agreeing terms. Inland Revenue explains the treatment of business asset sales, including stock, depreciation recovery, goodwill and GST. Apply that guidance with a tax professional to your circumstances.

If you're planning to sell

Starting early gives more room to work on the preparation; the slow ones, owner dependence and customer concentration, take most of it. Which ones to move first, and what each is worth to your price, depends on the business and on which buyer is likely to appear for it. That's a two-week piece of work, not a checklist, and it's what the Sale-Readiness Review does. If you'd like to talk about where you'd start, a twenty-minute conversation costs nothing.