Here is a summary of key things to bear in mind at the outset of the business sales process:
- Price it right
It is important that a business is properly valued and priced if you are to attract buyers but also achieve a price that represents a fair return for the work you have put into the business.
- Have up-to-date figures
Buyers and their advisers will want and appreciate being supplied up-to-date figures. This also sends a signal your business has been well run.
- Make the buyer feel comfortable
It is important to demonstrate to a potential buyer that this will be an easy business to take over, unless it’s not. List and briefly profile all your key customers, suppliers and service providers. Outline the major tasks in the business and how you handle them.
- Have things looking good
Businesses for sale are like anything for sale – presentation counts. Make sure the entire premises is clean and tidy, not just the front of house. That includes the office, amenities and storage/warehouse areas as well.
- Be honest
Tell it “warts and all”. If you lie about something or hide something and a potential purchaser finds out before the sale, you won’t have a purchaser any more. Due diligence is a process whereby the purchaser is looking to verify everything they already know about the business – not discover new issues that affect the risk profile of the investment.
- Give it time
Businesses generally take time to sell – months rather than weeks. Trying to sell in a hurry sends the wrong market signals and puts you in a weak position which makes it unlikely you will achieve the best possible price.
- Be able to talk business
Buyers respect vendors who know their business and can talk knowledgeably about it, and are more likely to respect their asking price. Be prepared to discuss profit and loss accounts from the previous three to four years, abnormal or non-recurring costs in the accounts, personal drawings, staff, and associated agreements that correlate to the future maintainable earnings of the business.
For more information regarding selling your business, feel free to contact us.
Source: Total Property magazine