Buying or selling a business (or a property) can be a stressful experience, that’s for sure. Not only is it a major financial decision, but it can also be quite an emotional rollercoaster.
The best advice, however, is to take the emotion out of it, and create a clear checklist for selling your business.
By formulating an action plan, with clearly defined tasks and goals, you will find it a far easier process, with a lot less stress.
1. Are You Ready To Sell?
At the very top of your checklist should be the question: Do I really want to sell? That may sound strange, but all too often, business owners regret their decision.
You should also consider whether the business is worth selling, or whether it would be better just to close it. A buyer is only going to be interested in a business if it is currently profitable, or if they believe they can make it profitable.
If you are selling the business because it is losing you money, the chances are you won’t find a buyer. In which case, it is quicker and less stressful to simply close the doors. If you can’t decide whether to close or sell, you can seek professional guidance.
2. When And How To Sell Your Business
The next important step on your checklist is to decide when and how to sell your business. Let’s start with the ‘when’.
The best time to sell is when your financials are at their best. For example, seaside hospitality businesses do most of their trade in the summer, so autumn is a great time to sell. A ski resort will be busiest in the winter, so put it on the market in spring.
Retail businesses can be measured in much the same way, whereas manufacturing businesses can be marketed at any time of year.
3. Selling And Marketing Options
When deciding how to sell your business, you have a few choices. You could sell it yourself without any help. That’s the cheapest option, but it’s a pretty huge task.
Or you could sell through business brokers. They have the knowledge, experience and contacts, but they also charge a commission.
Another alternative is to sell through a non-commission organisation. These companies have the knowledge and experience, as well as buyer-match services. They can advertise your business in print and online, using professional graphic designers and writers and don’t take commission.
4. Talk To Your Accountant And Solicitor
Of course, there are some professionals you definitely want on your side, and that’s your solicitor and your accountant. Make time to sit down with them early on in the plan, to ensure all accounts and compliances are up-to-date.
Serious buyers will ask a lot of important questions and you need to be across the answers. If your business requires licences, are they in place? Do you owe money on the premises or equipment? Do you have forward bookings/orders? Is the business a franchise? Are there any silent partners?
5. Profit Vs Revenue
Remember, buyers are more interested in profit than revenue. Whilst your revenue figures may look impressive, a smart buyer is going to ask about expenses, profit and cashflow, so be prepared.
Having all this information at your fingertips from the start will make the sale much easier later on. Your solicitor and accountant can also help you value your business.
6. First Impressions Count
Is your business ready for sale? In other words, is maintenance up-to-date? Are any repairs needed? Would it look better with a fresh coat of paint? Does your website give a good impression with no outdated information? Remember, first impressions count.
Unless you are selling at a bargain basement price, potential buyers will have expectations and you need to meet them. This is especially true if you are selling a freehold business – i.e. property.
Having already decided how to sell your business, you are now ready to market it. Of course, whoever you choose to sell your business will also be focusing on this important step. But that doesn’t mean you can’t market it, too.
7. Your Employees
Check first if perhaps one of your employees may be interested in purchasing the business. Or a family member, or friend. Spread the word, and use your social media accounts to market it, too.
Talking of employees, remember, you must do the right thing by them. Be honest with them about selling, and discuss their needs and feelings. Do they want to stay on with a new boss? Are they close to retirement? Are they owed leave? It is crucial to be clear on entitlements when you transfer a business.
8. How's Your Sales Pitch?
Prepare your sales pitch! In other words, what are you going to say when potential buyers contact you and ask questions? Be prepared – even make notes, so that you’re telling everyone the same information.
Once you have a buyer on the hook, it’s time to start negotiations, and then draw up the contract. Naturally your buyer will haggle on price and inclusions, so don’t take it personally. They are not trying to insult you or your business, they simply want the best deal.
At this stage your accountant and solicitor come back into play, to finalise the legals and numbers – and this includes the tax implications of selling your business. Once the deal is done and dusted, and the money is in the bank, it’s time to start the next phase of your life.
With a proper checklist in place to sell your business and a successful sale, you will emerge with a positive view to the future!
Sell your commercial property or business privately without business brokers. We advertise your business for sale or real estate listing in our go-to website, national glossy Coast to Coast Magazine and major real estate websites reaching many motivated buyers. Call now to sell your business or property 1300 793 792 or email [email protected].