NZ Businesses Often Unprepared For Sale At Exit Time

Most New Zealand SMEs have the potential to become highly saleable with the right approach, but most are not ready at the time when owners want to retire—with strategic improvements, however, a business can become market-ready in as little as 6 months to a year.

Steven Matthews, Business Development Manager for Link Business Brokers—New Zealand’s largest business sales company—says, “Many business owners assume they are sitting on an asset they can easily sell. In reality, many are not fully prepared for sale, and failure to address key issues prior to listing could erode up to 30% of their value”.

Given that 25% of SMEs are owned by baby boomers aged 61-79, a wave of business exits is expected over the next decade as they look to retire. However, without proper planning, some owners may find their retirement delayed.

Matthews says the most common vulnerabilities business owners need to fix include over-reliance on a single owner, non-transferable supplier or client contracts, regulatory compliance gaps, and financial instability.

Key areas to address before selling

1. Identifying, reducing, and mitigating risks 
Buyers conduct thorough due diligence and could walk away from businesses with high risks.

Vendors should proactively address buyer risks—such as supplier agreements and systems—to ensure potential buyers feel comfortable with the purchase.

“A structured risk-mitigation plan increases buyer confidence and strengthens long-term business sustainability,” Matthews says.

2. Demonstrating growth and scalability 
Buyers are primarily interested in businesses with a clear growth trajectory. A lack of scalability often deters potential buyers, especially in a competitive market.

Matthews says vendors should outline a growth strategy, whether through geographic expansion, new product development, digital transformation, or operational efficiencies. “A well-defined plan enhances perceived value and can create buyer competition.”

3. Strengthening systems and Ai adaptability 
Businesses with structured and efficient systems are generally more attractive to buyers.

“Poorly documented processes, outdated technology, and reliance on informal operations can delay or derail a sale. Vendors should ensure that core functions—including sales, customer service, supply chain, and financial management—are optimised,” he says.

Implementing automation and AI-driven solutions can improve productivity and future-proof operations.

4. Presenting strong, transparent financials 
Financial transparency is critical.

Buyers expect precise, accurate, and up-to-date financial records, including profit and loss statements, balance sheets, and tax compliance documents. Inadequate financial reporting is a common reason deals fall through.

Clean financials not only establish credibility but also ensure a smoother transaction process. Businesses with strong, well-prepared financials can often command a premium.

The baby boomer business transition

For many baby boomers, the sale of their business is their primary retirement plan.

However, as more businesses enter the market, competition will increase, shifting the balance in favour of buyers. Vendors who are caught unprepared may find themselves struggling to realise the full value of their business, which, in turn, may significantly impact their retirement prospects.

Three key steps for business owners

Start early – Preparing a business for sale takes time. Addressing risk factors, optimising operations, and ensuring financial transparency should ideally begin at least a year in advance.

Engage professionals – Legal, financial, and business advisors can help identify and fix potential issues before buyers raise them.

Think like a buyer – Buyers seek low-risk, scalable, and profitable businesses. Vendors should address potential concerns upfront and present a company that demonstrates strong future potential.

Matthews says business owners are advised to take action now to ensure their business is not only valuable but also saleable.

“Strategic preparation today could mean the difference between a comfortable retirement and financial uncertainty,” he says.

ABOUT

LINK International Group, founded more than 27 years ago, specialises in connecting business owners with buyers globally. With 23 offices across New Zealand, Australia, and the USA, its extensive network includes over 200 specialist Business Brokers. The company maintains a robust database of over 250,000 active buyers, ensuring it meets diverse client needs effectively and efficiently.

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