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SAV means stock at value or stock at valuation. It is the amount a buyer pays for saleable stock in addition to the agreed business price. If you treat SAV loosely, your final sale price can swing far more than you expect.

Handled well, SAV is simple. Define what counts as stock, agree the valuation basis, plan the stocktake, and document everything. That clarity keeps settlement smooth and prevents arguments after completion.

If you are planning a sale in the next 6 to 18 months, start with a readiness plan and sequence the work through the growth services, planning services, and exit services pages. For an overview of approach and independence, see Why Us.

1) Treating ticket price as SAV

SAV is almost never retail. It is usually cost or cost plus landed charges, not the shelf price. If you anchor negotiations on retail, you risk a last‑minute adjustment when a buyer insists on cost.

Fix this in the contract. State the method clearly and list what is included, such as freight, insurance, and duties. Also make it clear that saleable stock excludes items that a buyer will not reasonably sell.

2) Ignoring slow movers and dead stock

SAV should reflect stock a buyer can actually sell. Expired, damaged, obsolete, or last‑season items do not belong in the figure at full value. Paying full price for dead stock is a quick way to distort the sale price.

Start early. Identify slow movers, mark them down, or clear them before you bring the business to market. Put a simple rule in the contract for how to price questionable items and who decides condition on the day.

3) Leaving the stocktake to chance

Disputes happen when the parties do not agree how, when, and by whom the count is done. If your systems and cut‑off rules are not aligned, the stock figure becomes a debate rather than a number.

Plan the count. Decide timing relative to completion, who attends, how variances are treated, and how you will tie the count back to your system. Include a mechanism to appoint an independent stocktaker if needed. Your adviser can map this process in the timeline you build through planning services.

4) Mixing valuation methods

Sellers sometimes use different bases across lines without realising it. One category ends up at retail, another at cost, and a third at replacement cost. That mix erodes credibility and invites challenge.

Pick one base for the deal and use it consistently. If you need exceptions, list them and explain why. Consistency signals discipline and helps the buyer’s advisers reconcile the final figure quickly.

5) Forgetting the working capital link

SAV interacts with working capital. If your deal also includes a working capital target or peg, you can double‑count or undercount stock unless the definitions are aligned. That is how seemingly small drafting choices move large amounts of money.

Align the definitions. Make sure stock included in SAV is not included elsewhere in the peg or, if it is, that the math allows for it. Get this reviewed during the pre‑sign phase so you are not debating arithmetic on settlement day.

6) Leaving definitions out of the contract

Ambiguity is the biggest cost. If the agreement does not define stock, valuation basis, documentation, and dispute steps, the value of stock becomes a negotiation at the worst possible time.

Add a short schedule to the sale contract. Define what stock means, list inclusions and exclusions, nominate the valuation basis, set the stocktake date and procedures, and include a fast dispute mechanism. A few clear paragraphs prevent most arguments.

Practical SAV checklist for sellers

Use this seven‑point list to get SAV right before you list.

1. Define stock precisely and list what is excluded.
2. State the valuation basis and what cost includes.
3. Identify dead or slow‑moving lines and decide how to handle them.
4. Plan a joint stocktake and document cut‑off rules.
5. Align SAV with any working capital target.
6. Prepare a reconciliation pack with invoices and count sheets.
7. Put a simple dispute step in the contract with an independent stocktaker.

If you want help sequencing these tasks without slowing day‑to‑day operations, fold them into a sale‑readiness plan via planning services and use growth services to reduce slow movers early.

Contract language examples you can adapt

• Definition: “Stock means saleable goods held for sale in the ordinary course, excluding obsolete, expired, damaged, consignment, recalled, and customer‑specific items.”
• Valuation: “SAV is at cost, being landed invoice cost inclusive of freight, insurance, and duties, applied consistently across all lines.”
• Stocktake: “A joint stocktake will occur within 24 hours prior to completion using the agreed procedures. If there is a dispute on condition or count, an independent stocktaker will be appointed, and their determination will be binding for SAV.”
• Dispute timing: “Any SAV dispute must be notified within five business days of completion with supporting documents attached.”

Your legal team can tailor these to your structure as part of the workstream run through exit services. If you want a deeper independent perspective for price positioning and evidence standards, review the process under Why Us.

How buyers think about SAV

Buyers test whether the stock is truly saleable at the assumed price and whether the system can prove it. They look for clean count procedures, sensible write‑downs, and invoices that reconcile to the final figure. They also check whether the stock profile matches the sales profile. For example, if a store has a large tail of sizes that rarely sell, a buyer will probe whether those lines should be discounted or excluded.

Sellers who think like buyers get fewer questions and better terms. That is why it pays to do a dry‑run count and a reconciliation pack a few weeks before you launch the campaign.

How to prepare evidence the easy way

Build a simple working file with three parts. First, a list of SKUs with quantity, location, and cost. Second, a schedule of proposed exclusions or write‑downs with a brief reason. Third, a folder of invoices and freight documents to support cost. Keep these in a shared folder with cross‑references so anyone can trace a line from the schedule to the source.

Present the same structure in your information memorandum. Add a short narrative that explains seasonality, stock turns, and actions taken to reduce dead stock. This keeps buyer attention on the business, not on the paperwork.

Common questions to resolve early

• Are raw materials, work in progress, packaging, or consumables included?
• How will consignment or third‑party stock be treated?
• How do you price seasonal stock that is out of cycle at completion?
• Who attends the stocktake and which reports are the source of truth?
• What happens if a variance is identified after settlement?

Agree these points early and include them in the term sheet. Surprises late in the process reduce leverage and invite unnecessary delays.

Putting SAV in the wider context of value

SAV is only one part of the overall price equation. Buyers still value the business on quality of earnings, risk, and growth. But getting the stock figure right avoids sudden swings that can undermine trust. It also shortens the timetable because you remove friction that slows diligence.

If you want to understand how stock treatments interact with valuation methods and buyer multiples, map the moving parts with a valuer who understands private markets. You can start that conversation through the planning services page and integrate the outputs into your sale process via exit services.