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For a New Zealand trades, contracting or distribution business, sale preparation often starts with who quotes the work, who holds the customer relationships and how the team operates after the owner leaves. Trade buyers, acquisition groups, incoming owner-managers and management teams may examine those questions differently. Start with the evidence for your business.
Three important questions for a trades business
Who quotes the jobs? If quoting depends on you, explain the work, knowledge and authority involved. Train another person where practical and retain examples of completed quotes and actual margins. A buyer needs to understand the replacement cost and how that responsibility could transfer.
Who the customers belong to. A distributor with forty percent of revenue through one national account, or a contractor with half its work from one developer, will be asked for the contract in the first meeting. What concentration does to the price, and what to address before listing.
Will the staff stay. Qualified tradespeople are the asset. Missing agreements and unquantified leave liabilities make it harder to assess retention and transaction costs. Signed, current agreements for everyone, and leave quantified and accrued, is what a buyer expects to find.
The numbers a buyer's accountant will rebuild
Ask your accountant to explain owner pay, vehicles, related-party costs, stock and work in progress. Owner drawings are not automatically an expense or an add-back: establish what was actually recorded in the earnings figure. Every proposed adjustment needs evidence and a consistent period. Prepare the earnings adjustments schedule. Also document stock, debtors, creditors and work-in-progress assumptions so the buyer can assess working-capital requirements and what is included in the price.
Suppliers, agencies and the change-of-owner clause
Gather distribution, agency and material supply terms, including informal arrangements. Ask your lawyer to identify assignment, change-of-control, consent and termination provisions for the proposed transaction. Establish which supplier discussions are needed before listing rather than assuming the arrangements will continue unchanged.
The licence in your name
Establish which registrations, practising licences and consents the business relies on, who holds them and what must happen on a change of ownership. A licence held by the owner is different from one held by the company. Ask the relevant regulator and your lawyer to confirm the requirements for each activity, and plan who will hold the necessary qualifications after handover. Do not assume that transferring the business automatically transfers every permission.
Yard, workshop, warehouse
If you lease, gather the complete lease, renewals and variations for your lawyer to review; tenure and transfer requirements can affect continuity and funding. If you own the premises, explain whether the proposed sale includes the property or a new occupancy arrangement. Identify relevant site permissions, hazardous-substance requirements and health and safety records with the appropriate advisers. An unresolved permission can affect whether a sale is possible, as well as its timing.
If you're planning to sell
For a trades or distribution business, owner dependence, staff and customer concentration usually carry the weight, and the licence question can stop a sale on its own. Which to move first depends on who is likely to buy you, and that's the question the Sale-Readiness Review answers in two weeks. Score yourself on the free readiness check, or tell me about the business and I'll tell you what a buyer would ask first.
About the author
Oscar Rodwell runs Rodara Advisory, preparing New Zealand businesses worth NZD 1–10 million for sale. His experience owning, running and selling businesses in retail, manufacturing, hospitality and property informs his work on earnings, people, agreements and handovers. About Oscar.
