Selling a business that has been a central and important part of your life is challenging. This is an important time and process. Above all else take advice!
It is vitally important to remain objective and fully aware of all of the various aspects that affect the successful sale of any business. More often than not the business owner is not the best person to market and present the business to potential buyers. This task is best handled by an experience professional business broker.
Selling a business is all about strategy, timing, past business performance, presentation and return on investment to the new business owner.
Selling your business should be part of your plan from the beginning. That is from when you started or purchased your current business. Start with the end in mind.
Prepare your business so that it is saleable when the time is right.
Timing in business is everything is a well-known axiom. Success is when preparation meets with opportunity.
Every business has an ideal time when it should be on the market to attract willing buyers at an attractive price to both vendor and purchaser.
That time could be after the end of a financial year when accountant prepared financials are available.
The start of the peak trading season when then business is most activate is attractive to a new purchaser.
Consider what part of the financial cycle the national and state economy are in as good indicators to sell a business for best results.
Past Business Performance:
Every vendor should have available 3 years accountant prepared financials to provide to a potential purchaser and their accountant. Plus there will be requests for additional information as part of a proper due diligence process.
If the above is not available expect that the final sale price could be discounted.
Good businesses that are well documented and presented will always attract better quality buyers and a better sale price.
Perception is reality and first impressions count. Present your business at its best to greatly enhance the sale prospects for your business at an attractive price.
If it is glaringly obvious that a business is in need of attention this will have an immediate and negative impact on the sale price.
Premiums prices and amounts paid for goodwill are a reward for effort, endeavour and expertise in creating a sustainable, profitable business.
Return on Investment:
This should be the number one consideration for any buyer and often it is not.
Any discerning buyer will be aware and well advised about business financials with a clear focus on a return on investment [ROI] for both the capital and time they will invest in owning and running any business they purchase.
Any vendor must be well prepared to support a realistic and commercially sound asking price.
A word of warning – proceed with caution!
Business sales occur across the whole spectrum of business activities from liquidation and fire sales to the sale of nationally recognised market leaders.
Everyone one of the maxims above can be a part of a sale process or not at all totally reliant on the motivations of the buyer and the seller.
Market forces and personal agendas will play a large part in the process.
Again, take advice often and do not go it alone if your intention is to ensure the best result. And be very well prepared.