Making the decision to sell your business is not an easy one. In many ways it is a much harder decision than selling your property, as it is something you have dedicated time and money to, working hard to build it up and make it successful. Selling it is a significant decision that will change many aspects of your life.
It is also hard because, in order to achieve the best outcome, you need to maintain a sound business approach to selling, but emotion will also play a major part, and it’s crucial to find the right balance. Believe it or not emotion will help you make a sale, as a prospective buyer will be drawn into the ‘idea’ and love of the business, rather than simply looking at the bottom line.
But in order to manage these emotions it’s a good idea to prepare a sound exit strategy. In fact, it’s crucial. Yet research shows that only 47% of small business owners have an exit strategy (Commonwealth Bank Local Business Owner Report).
60% of those are still actively reinvesting profits back into the business and half are working more than 50 hours a week, even if planning to sell the business.
Some say the best time to start planning to sell your business, is on the day you buy it! In short, work towards creating a sound, saleable business ahead of time. For example, if YOU are the business, it’s time to make yourself redundant so that the business can sell as a separate entity.
An exit strategy spells out how you plan to sell the business. There are four steps to selling your business starting with the decision to sell.
In just the same way you would prepare a residential property for sale, you need to take practical steps to prepare your business, to create a good first impression to a potential buyer. This will boost the perception of value to the buyer and may increase the price you can ask for your business.
You need to carry out an inventory, and sell all obsolete or slow moving stock items, in order to improve your sales figures, and eliminate disputes about the value of inventory during the sale. You will also want to sell any redundant or obsolete plant and equipment, machinery and spare parts that are no longer required.
What about your business premises? Are they leasehold? Then you need to make your landlord aware of your plans. Freehold? Clean up, maintain and paint the premises where necessary and make sure the premises comply with all regulatory requirements.
A very important factor is to keep your staff informed about what’s happening, and ensure they take their leave and other entitlements prior to the sale. Find out if they would be keen to stay on under a new owner if that situation arose. Having skilled and experienced staff in place could actually help you make a sale.
The next important decision to make is WHO should sell your property. Will you hire a broker or do it yourself, with the help of a professional, private sales company? If you are not comfortable making the sale, or don’t feel you have time, then a business broker might be a good option. But remember, brokers charge 7% to 10% of the business sale in commissions. That’s a big chunk of cash that could make all the difference to your future plans, be they buying another business or retiring.
With advancements in technology and the rapid growth in internet use, an increasing number of small business owners choose to market their own property. By working with a company such as Coast to Coast Media, it’s easier for owners to be in control of the sale and to achieve a better financial result.
With over 37 years’ experience behind them, Coast to Coast Media offer a complete marketing solution, are Australian-owned and are not affiliated with any real estate agency or group. They provide the tools you need to successfully sell your business privately – with absolutely no commission taken – ever!
Every campaign is different, with Coast to Coast customising the marketing to suit your business, and then targeting specific buyers, locally, interstate and overseas. Your tailor-made marketing campaign will use a variety of marketing mediums, including Coast to Coast’s national magazine, expansive internet coverage and social media. You never know where your buyer may come from!
The team stays in touch throughout, providing feedback and professional advice. In this way, you can continue to represent yourself as a serious professional whilst exposing your business to buyers who may have otherwise overlooked you.
So, if you’re serious about selling and don’t want to share your hard-earned profits with a broker, the right solution is right here.