As SA’s president Cyril Ramaphosa recently confirmed in his State of the Nation ( SONA ) address, South African small business entrepreneurs remain at the heart of the local economy.
But in a world of macroeconomic uncertainty, tightening budgets, and stiff competition, selling a business in Mzansi and walking off into a bushveld sunset with plenty ‘iKlipas’ (R100 notes) in your back pocket to feed to your hungry pride of lions is no simple task!
The headline here is: perform your pre diligence . Due diligence is the buyer’s way of lifting the hood, kicking the tyres, and making sure everything checks out before they hand over the money. It’s a deep dive into your business's financials, operations, legal standing, and risks to make sure the sale price—and everything you’ve promised—holds water.
So pre-diligence comes before that. It’s about building buyer trust by getting your documents in order, showing professionalism, and ensuring there are no unpleasant surprises. This helps you maintain your asking price, shortens the deal cycle, and reduces the chance of a deal falling apart late in the game.
Even if you’re not thinking about selling yet, there’s power in preparing. Positioning your business to be sale-ready is simply good practice – it forces you to tidy your finances, solidify your operations, and prove your value to others.
So whether you're running a small kasi outlet in Jozi or a nationwide logistics company that’s helping to drive our country’s economic growth , preparing to sell your business is not something to leave to the last minute.
And when a well-prepared sale could mean the difference between an underwhelming offer and life-changing equity, it’s worth paying close attention to our recommended steps on preparing a business for sale in South Africa in 2025! Let’s begin…
1. Clarify Your Exit Strategy
First, take a moment to define why you're selling. Are you seeking capital for your next venture? Looking for a career change? Retiring? Is your reason for selling a business emotional or practical? Understanding your "why" will shape your approach to price, buyer selection, and the transition process.
Before you start speaking to brokers and filing documents, consider whether you're planning to sell outright (full ownership transfer with no continued involvement), exit gradually (e.g., handing over to family or a manager), or retain shares and perhaps act as a consultant during a transition period.
These paths come with different timelines, tax implications, and emotional considerations. Being clear on your ‘why’ upfront will help you avoid stress later on.
2. Get a Business Valuation
Understanding what your business is actually worth is a critical first step in preparing to sell your business. Many South African business owners have an inflated sense of their business' value, often rooted in emotional attachment rather than hard numbers.
A very rough rule of thumb for valuing a business is multiplying annual turnover by three to five years.
You can start by using our free ValueRight tool to get an accurate and reliable valuation for your business. A professional valuation considers your net profit over several years, tangible assets (equipment, property, stock), future earning potential, intangible assets (brand equity, customer loyalty, Intellectual Property), as well as market and industry trends.
3. Get Your Finances Tidy and in Order
Potential buyers will want to see a clean and credible set of books. Poor financial record keeping is one of the biggest red flags in selling a business.
Start by separating your personal and business expenses and declaring all income (many buyers distrust businesses with large "unofficial" cash flows).
Then set about organizing three years of financial statements and ensuring your tax filings are up to date. If possible, engage an auditor or bookkeeper to clean up your numbers and prepare a summary pack for potential buyers. This builds trust and can significantly increase your sale price.
4. Due Diligence: Resolve Legal & Compliance Issues
South African buyers conduct rigorous due diligence. Remember that due diligence is a buyer’s backstage pass to your business—so make sure what’s behind the curtain is ready for the spotlight!
This means you need to ensure that your business is 100% compliant with:
- SARS ( tax clearance certificate )
- Companies and Intellectual Property Commission (CIPC) filings
- Employment contracts and UIF
- B-BBEE certification (you can do this on bizportal )
- Health and safety regulations ( Occupational Health and Safety Act, 1993 )
- Franchise or supplier agreements (if applicable)
- Licences and permits
You should also compile an updated asset register as well as a complete list of contracts and obligations, copies of leases or property deeds, and any shareholder agreements you may have in place. These documents reassure buyers that your business is in good standing and ready to operate post-sale.
5. Optimising Your Business for Handover
Consider the buyer’s perspective: they don't just want a brand or product — they want a functioning, profitable operation they can take over with minimal disruption. Put business checklists in place that document your systems and processes for everything from stocktaking to invoicing.
You should already have these in place as SOPs (standard operating procedures). If the business relies too heavily on you, this can lower its value. Start delegating and upskilling team members to reduce key-person risk.
While you’re at it, review your staffing solutions and ensure that contracts are in place and your teams are stable. Make a ‘snag list’ of anything from leaky plumbing in your building to an outdated website. These are small issues that can impact perceived value.
Lastly, focus on the positive by highlighting recurring revenue. If you have clients on retainers or subscriptions, showcase this stability!
6. How to Sell a Company: Strengthen Your Brand & Sales Story
Buyers aren't just purchasing numbers. They're buying into your vision, reputation, and market potential. Learning how to sell a company involves learning how to sell yourself.
Create a compelling business profile (sales deck) or "sales pitch" that includes a brief history and founders narrative (everybody loves a good ‘we started in our parents garage’ origin story).
Use high-quality photos, graphics, and a consistent tone. Think of it as a dating profile for your business — you want to attract the right match!
Articulate your company’s inspirational vision, mission, and values, ideally presenting a cohesive brand voice. Back this up with some key client testimonials and speak to your business’s competitive advantages.Then talk about market trends and opportunities, as well as untapped growth potential (local or regional).
Check out our guides on selling a business in South Africa if you need more inspiration.
7. Tax on the Sale of a Business: Plan Ahead
Tax on the sale of a business in South Africa can be complex . You may be liable for:
- Capital Gains Tax (CGT) if you sell shares or assets
- Dividends Tax if funds are paid out to shareholders
- VAT if the business is not sold as a going concern
In South Africa, selling a business "as a going concern" has specific tax advantages, notably zero-rated VAT. To qualify, both the buyer and seller must be VAT registered. The business must continue operations without interruption, and the sale must include assets necessary for continued operations.
This can be a smart way to structure the deal, but you must document it correctly. It’s crucial to work with a tax specialist and accountant before you go to market. Smart structuring — like selling as a going concern, or using a holding company — can save you significant tax. This is especially true if you’re planning to emigrate, reinvest in another business, or retire.
8. Market Your Business the Right Way: Actually Selling a Business
How you market your business is as important as what you're selling. You want qualified, serious buyers — not time-wasters or opportunists. Be sure to screen buyers before granting access to financials and use a non-disclosure agreement (NDA) before sharing sensitive information. Have those ready before putting the word out.
Start with your personal and professional network when you’re confident that whispers of you wanting to sell won’t affect staff morale or let your business competitors smell blood in the water.
Double down on your hard work and serious intentions by engaging a specialist business broker who understands your sector and has access to pre-vetted buyers.
Listing your business on online platforms with good traffic and serious buyers is another smart move.
9. How to Sell a Business: Finding the Right Buyer
Not all buyers are created equal. A good buyer will understand your industry (or be willing to learn), have access to capital, and align with your values or vision (especially if staff or customers matter to you).
So whether you sell to a private equity firm, a family member or employee, or even a competitor looking to expand, you should resonate with their values and good business acumen.
This goes both ways of course, so the more prepared and transparent you are, the more likely you are to find the right fit!
10. Negotiate, Close & Transition: Signing on the Dotted Line
Once you've found a buyer and agreed on a price, the next step is to finalise terms. This includes:
- Agreeing on assets vs shares sold
- Drawing up a detailed Sale of Business Agreement
- Setting payment terms (upfront vs instalments)
- Clarifying warranties and indemnities
- Preparing a handover plan
Due diligence will begin at this stage, so have your documentation and records ready. Your legal and financial advisors are key here. If needed, agree to stay on for a few months post-sale to ease the transition and reassure clients and staff. Only then can you walk off into that beloved bushveld sunset you’ve been dreaming of!
Conclusion
Selling a business isn’t something you do every day, and it’s easy to feel overwhelmed by the admin, the legal jargon, and the sheer emotional weight of letting go. But remember: this is the reward for your years of graft.
With the right preparation, expert guidance, and a clear strategy, you can exit on your own terms and unlock real value from what you’ve built. So take it one step at a time, reach out for help when you need it, and keep your eye on the bigger picture. The effort you put in now will shape the legacy—and the future—you walk away with.
FAQ
How do you prepare a business for sale?
Start by getting your financials in order, resolving compliance and legal issues, planning for tax, documenting your operations, strengthening your team, and building a compelling sales profile for potential buyers.
What is the best way to sell a small business?
Work with a reputable broker, prepare for due diligence in advance, price your business realistically, and market through trusted platforms that attract qualified South African buyers.
How do you value a business quickly?
Use tools like
ValueRight
to get a quick ballpark figure based on your sector and turnover. For an accurate valuation, bring in a professional who understands your industry and the local market.
Thinking of preparing to sell your business in 2025?
Start early, assemble the right advisory team, and focus on building a buyer-ready operation. And when you're ready to sell,
BusinessesForSale
can connect you with serious, qualified buyers across South Africa.
