Trading in old iMac, need to transfer disk contents to new iMac

I am trading in my old iMac. I have to have the hard drive erased before I turn it over to the dealer in order to purchase the new iMac. I have an external backup drive. Can I backup old iMac,, then erase hard drive and when I get the new iMac can I transfer hard drive contents to new iMac from external drive without any problems. I am a novice computer geek at best.