Selling a Business and Getting a Good Price

Last updated: August 2026

At some stage you will decide on selling your business and want your best price. There are a number of factors that will influence your business's value.

When a business is being appraised by a perspective buyer he/she will be weighing up these factors when assessing the price. Obviously the Buyer wishes to close the deal at the lowest possible price, however most will also have a top-price, beyond which they will walk.

Plan your exit well in advance by having a sale-strategy to ensure you get the best price for a business.

Key characteristics that add value; strong cash flow, good history and reputation, growth industry, competitive advantage, niche business with room for growth, good plant/location/systems, good staff.

Characteristics that may lower its value; Distressed business, poor industry outlook, price cutting, weak financials, small customer base, key relationships held with owner, poor records/systems/plant. Attending to these long before you put your business on the market will ensure you get your best possible price.

5 Key Points for Preparing Your Business for Sale

1. Be clear why you're selling

A vague or evasive answer to "why are you selling?" makes buyers nervous, and nervous buyers negotiate harder. Have a clear, honest answer ready - retirement, a change in direction, a new venture - so it doesn't become a point of doubt during negotiations.

2. Buyers want cash flow - so boost the sales and compress the expenses

Since most small business valuations come down to an earnings multiple, the cleaner and higher your reported cash flow, the higher your likely price. See Valuing a Business for Sale for how that multiple is actually calculated.

3. Appearances count, and so do well-documented systems and agreements

A tidy, well-presented business signals a well-run one, and documented systems reduce a buyer's perceived risk. This is covered in depth in What Do Business Buyers Want?

4. Ensure everything has a value and is well packaged

Go through the business line by line - stock, plant and equipment, fixtures, intellectual property, customer lists, supplier agreements - and put a value against each. Buyers (and their advisers) will do this anyway during due diligence; doing it yourself first means nothing gets undervalued or left out of the conversation, and you walk into negotiations with a defensible, itemised figure rather than a single round number a buyer can simply push back on.

5. Eliminate any surprises

Nothing erodes a negotiated price faster than a buyer discovering something during due diligence that wasn't disclosed upfront - an unresolved lease issue, an undisclosed related-party arrangement, a piece of equipment that isn't actually owned outright. Get your accountant or lawyer to review the business as if they were the buyer before you list, and deal with anything they flag. A buyer who feels ambushed rarely keeps negotiating in good faith - they either walk, or use the surprise to justify a lower price.

Learn the the 9 steps to selling a business in NZ, and our options for listing your business for sale.

Frequently Asked Questions

What most affects the price a business sells for?

Cash flow is the biggest single factor, alongside how well-documented and self-sufficient the business is. A business with strong, verifiable cash flow and systems that don't depend on the owner will consistently achieve a better price than one without.

What lowers a business's sale price?

Weak or unclear financials, a small or concentrated customer base, key relationships tied to the owner personally, poor records or systems, and being in a declining industry all tend to reduce the price a buyer is willing to pay.

How do I avoid a buyer renegotiating the price late in the deal?

Have your business reviewed as if you were the buyer before you list - an accountant or lawyer can flag issues that would otherwise surface during due diligence. Disclosing problems upfront, rather than having a buyer discover them, protects your negotiating position.