How To Sell Your Business In Singapore
If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).
Table of Contents
Introduction
It’s a big decision to finally resolve to sell your business in Singapore.
You started off small and have grown your company substantially. You’ve worked really hard and poured your heart and soul into it. You want to be sure you are doing all the necessary steps now that the time has come to sell it. In order to benefit yourself as much as you can.
As you consider your alternatives, there is a lot of confusion going through your head. The transaction should be straightforward and lucrative. It can be difficult to sell a firm, so you should make every effort to ensure that everything goes according to plan.
This guide will help you determine the things to consider, as well as the steps you need to take, to sell your business in Singapore.
9 Things to Consider Before You Sell Your Business in Singapore
1. Create a strong brand for your business.
It takes time to sell your business in Singapore (or in any other nation, for that matter). Instead, in order to make the most of your company, you must arrange it well in advance. The goal is to establish a strong brand over time and increase its recognition within the intended market.
You may do this by using a thoroughly thought-out marketing strategy that includes a number of components. For instance, you might try these things:
- Establish a strong online presence with a large following of devoted users.
- Create connections with consumers via email newsletters.
- Consult essay writers or resume assistance companies to assist you in publishing a ton of high-quality material.
- Plan business gatherings to attract customers ready to make investments in Singapore.
2. Get your financials in order.
You also need to plan your finances and maintain all of your documents organized and spotless. Before speaking with possible buyers, get in touch with your accountant and complete the paperwork since they will want your financial documents right away.
3. Boost your sales.
All businesses have products they sell. It doesn’t matter if it’s a straightforward good or service—the essential goal is to significantly increase your sales performance in the months before you sell your business in Singapore. Why is that particular element so crucial?
Well, buyers of businesses in Singapore will be interested in how your firm is performing right now. They don’t want to invest in a company with little to no consumer base, after all.
In such situations, you should take all necessary steps to advertise the brand through promotional activities and close as many agreements as you can before entering into negotiations.
4. Plan your exit strategy.
Another important consideration is the exit strategy. What are your plans for the future? Are you planning to start a new business right away or will you take some time off first
Do you intend to leave Singapore or stay? The way you answer these and other questions might have a significant influence on your sales plan, so be sure you answer them accurately and honestly.
5. Determine the most affordable pricing.
Another factor to consider before you sell a business in Singapore is the lowest price for your firm. It is the absolute minimum below which you will not go.
This is critical since you do not want to wind up owing money. Because a corporation is normally worth a multiple of its sales, the purpose is to calculate your investments and future earnings. You can finally sell your business in Singapore for up to ten times the company’s projected worth.
6. Offer your staff a stake in the company.
Many entrepreneurs discover a buyer among their present workforce. Why is that? The solution is straightforward: your team is aware of the unique characteristics of the company, is aware of its true worth, and accurately predicts its potential for profit-making.
At the same time, they are experienced business managers and have solid relationships with their current clientele. You likely won’t even need to look for another investor because all of these elements can persuade your employees to consider buying the business.
7. Make use of online marketplaces.
Through online sales platforms, it is simple to sell your business in Singapore. Because there are so many user-friendly tools available on the Internet that may help you find ideal applicants for purchasing your business, this approach is quite straightforward.
A website called Business for Sale is one you might want to look into. With a database of over 17 thousand enterprises across a wide range of sectors, it is the biggest buy-and-sell platform in Singapore. From all across the world, the site draws more than 100,000 customers.
You should definitely try out Business for Sale, but you can also do an internet search to find other intriguing tools if you choose.
8. Employ a business broker.
The sixth and easiest suggestion on our list. In other words, you can merely pay a specialist to help you discover the best bargain. Strong business ties are widespread among Singapore’s business brokers, which is a benefit for foreigners looking to sell a firm in this city-state.
Because it manages a sizable database of domestic and foreign purchasers from China, Australia, Russia, Malaysia, South Africa, and many other countries, LNT Global is one of the most well-known business brokerage services in Singapore. Buyers from other countries make up more than 80% of their clientele.
Of course, there are plenty of different business brokers to research online, so be sure to do so before choosing anyone.
9. Utilize display advertising.
The final option is to use display advertising to publicize your company and encourage potential customers to contact you. Modern professionals typically undertake internet searches before taking any actual actions, making it a very effective tactic.
In terms of advertising, Google should be your first pick because it is the most popular search engine on the planet. The platform drives the bulk of Internet traffic, so you can reach out to just about any user who could be interested in buying a firm in Singapore.
4 Steps to Sell Your Business in Singapore
1. Getting your business’s financials in order and preparing preliminary papers.
It is vital to compile and finalize the papers before beginning the search for a possible buyer. Important papers would include:
- Financial statements;
- Business projections;
- Asset and equipment inventories; and
- The company’s operating manual(s).
Before you sell your business in Singapore, you should carefully check these documents to see whether any revisions are necessary. For instance, you could realize that before your company is ready to be put up for sale, you need to replace any damaged equipment or pay off some debts.
Additionally, you would want to ensure the accuracy and thoroughness of the information provided therein since some documents, such as the organization’s operational manual(s), may eventually need to be shared with a potential buyer(s).
2. Find a buyer and begin negotiations.
The following critical stage would be to publicize the sale and locate possible and qualified purchasers.
To begin, you should not limit yourself to locating just one potential buyer; instead, cast a broader net and strive for two to three prospective purchasers, since you never know whether some of them would back out during the subsequent talks and discussions.
It would be best to sign a non-disclosure agreement (NDA) when you start the preliminary round of negotiations.
This is done to protect your company’s data and information, as you will be discussing and disclosing potentially sensitive information about your company when negotiating with possible purchasers.
Consider signing a Memorandum of Understanding (MOU) with the possible buyer(s) once the initial round of negotiations is through as well.
An MOU outlines the criteria that have been agreed upon for the transaction to proceed and documents the parties’ understanding of the terms that have been discussed and agreed upon. The secrecy and exclusivity clauses in the MOU may also be rendered legally binding.
Unsure of the best way to approach creating and writing these documents? If you want to make sure that your company’s interests are adequately protected during the negotiating process, you might choose to hire one of our contract writing attorneys to help with the preparation of the NDA and MOU.
3. Conducting due diligence investigations and closing deals.
The prospective buyer(s) of your business may desire to perform due diligence on it in order to gain an understanding of its current legal, financial, and commercial condition and to be alerted to any potential red flags, such as any existing and contingent liabilities.
This would entail reviewing crucial official papers, and significant contracts, and doing litigation/bankruptcy searches on key company persons.
As a result, as the seller, you should be prepared with your data room, which is a repository of papers and information available to potential purchasers in either physical or virtual form.
When risks or difficulties are detected in the business, repercussions may occur. For example, the buyer may bargain for a lesser price or request that indemnities be included in the final sale and purchase agreement.
In order to prevent being in an unfavorable position during negotiations, you may wish to make the required corrections or arrangements after having your data room in order.
4. Signing a sale and purchase agreement and closing the transaction.
The signing of a sale and purchase agreement would complete the transaction. This agreement specifies the specific terms and conditions for the sale and acquisition of the business and might contain clauses such as:
- Warranties and representations;
- Indemnification;
- Mechanisms for dispute settlement in the case of a dispute; and
- The agreement’s governing law.
Don’t worry if you’re not familiar with these terminologies; get in touch with one of our corporate attorneys for guidance and assistance while you create and complete the sale and purchase agreement.
Additionally, various transfer and permission paperwork will probably need to be signed in order to complete the sale of a firm. For instance, upon the conclusion of the transaction, you might need to transfer a lease to the buyer.
To effectively complete the transaction, you might also need to follow specific execution requirements in the sale and purchase agreement and other ancillary paperwork.
You might be unfamiliar with these minute details, so give yourself some piece of mind by hiring a qualified attorney who has expertise in organizing everything before, during, and after completion.
Final Thoughts
Singapore has one of the strongest economies in the world, making it a great place to start, purchase, or sell your business in Singapore. Owning a business in this city-state gives you the opportunity to profit greatly by selling it to national or worldwide clients.
This article covered 9 useful things to consider and 4 easy steps to sell your business in Singapore. Remember the advice mentioned here and use it to negotiate the best deal for your company. The strategies just described here have shown to be quite effective in real-world scenarios.
Lastly, if you have any additional fascinating thoughts or experiences with business acquisitions in Singapore, please don’t hesitate to share them in the comments; we’d love to know your thoughts!
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
