Owning a business can be one of the most challenging yet rewarding assets a person can possess. The benefits, in terms of financial reward and lifestyle, can be life-changing for many of us. The issue is, so many business owners overlook the importance of planning for the successful sale of their business and failure to do so can have detrimental effects on the sale process, the time on market and more importantly, the final sale price.
So we have to ask a few key questions – Is now your ideal time to buy or sell a business or franchise? If so, are you ready? And what are some key steps you can take? Firstly, the world is always changing and there are always opportunities, so when considering if now is the right time, it becomes more about your own circumstances, aspirations and plans than the general market conditions which fluctuate from time to time.
When considering you’re ready… It sounds obvious, but so few people wanting to sell their business are prepared for what they will do next. Always start with the end in mind. Have a plan, even if your plan changes, at least you have a place to start and an idea of where you might like to end up.
As specialists, we see what is happening with businesses across most industries and at different values. Every day we are seeing changes with financiers lending policies, with market conditions, we have witnessed the GFC and Covid-19, changes in industry legislation, changes in local economies and infrastructure, trends, and changes to buyer’s preferences. With all that in mind, we continue to see and help business owner to successfully sell their businesses.
Most people say the hardest part of selling a business is finding a buyer, however in my experience a well-considered promotional and marketing campaign organised by specialists can result in lots of buyer interest which can help business owners to sell their business for a higher price, and much sooner. There are numerous ways to find a buyer, although the key is positioning yourself and business to the market so genuine interest is expressed by mostly genuine buyers.
The truth is anyone can claim to be an expert, but the owner of the business usually understands the strengths and attributes of the business better than anyone, so positioning the business and highlighting the positive attributes of the business, as they relate to a new owner can be crucial, so as a business owner, never underestimate just how powerful your own experience and story can be in the sale process, especially when a buyer is nervous and needs comfort and confidence in moving forward.
While there are more buyers, they are cautious and often take their time assessing and evaluating a business. Buyers will compare your business with others on the market and they will quite thoroughly measure the presented opportunity to their current situation to ensure it is the best fit for their personal needs and future plans.
In order to present your business in the most attractive way and to a wider catchment of buyers, consider taking the following steps. This will ensure buyer objections and the perceived or actual risk that a buyer and their advisors may detect as part of their due diligence and buying decision are minimised.
1. Ensure all owner wages and superannuation are paid at an acceptable market rate
2. Profitability is in line with the capital required to pay back the purchase value (Return on investment)
3. Security of lease tenure to amortise the loan period and secure the business
4. Ensure that upon sale the business can maintain the status quo and current earnings
5. The business maintains supplier and customer relationships and third-party agreements
6. Training and transition planning ensures a smooth and successful handover
7. Be aware of any competitive or legislative changes on the horizon
These are just some of the key components which should be considered when preparing a business for sale, and in turn, that can affect the value of the business. Buyers will scrutinise your business, however, the more comfort and confidence they have about what your business will deliver them as a new owner, the more likely a buyer will move forward at a higher price.
Exciting times ahead
Maintaining confidentiality around the sale is often crucial to protecting the value of the business for both the seller and the buyer. Our tools and proven marketing and advertising strategies mean we do this better than anyone else. We have more access, more resources and more avenues to help business owners promote a business for sale. We dedicate a lot of time and resources to helping business owners attract genuine buyers to businesses, therefore achieving faster sales outcomes.
Our proven marketing helps business owners in wide variety of industries, size and location. Our comprehensive marketing enable business owners to attract and engage with more genuine buyers, from diverse backgrounds, located around Australia and Internationally.
Financial freedom and family life
We are seeing so many people seeking to buy a business with the objective of gaining control of their life. Balanced family life is very important these days, and buyers are looking for an opportunity to acquire businesses that not only makes financial sense but also caters to their family situation. Buying a business can be the most financially and personally rewarding experience, and successfully selling the business, “the asset”, can provide a financial windfall that pays off a house or sets the seller up for a better retirement.
How to prepare
Buyers ultimately need lots of different information before they can decide how to move forward, and as a business owner, you will most likely be able to provide most of this information yourself, although it’s important to know that you can get support from business professionals such as your accountant, a Business Broker, a Business Coach or even your solicitor might be able to help, although as with most things in life, the more information you can provide yourself or you can do for yourself, the more money you can save. Its always a balancing act to determine just how much work someone should do themselves, and when to get in a specialist to help, but in my experience business owners have a pretty good understanding of their own capabilities and limitations, do what you can to help yourself, and reach out for help when you need it!
When preparing for a sale, get as much information as you can about the business, and use the many professional tools available to help you be ready and to present the business to buyers, and to give yourself the best chance of selling, including with an extensive marketing and advertising campaign.
If your interested in saving money by selling your business yourself, use our calculator to see how much you could save yourself.
Some information you will need to have available for a buyer,
Pricing the business correctly is also important. Business owners can get a good idea of the value of their business through discussions with their accountant, business valuers, business brokers and using some good business evaluation tools or by talking with experienced business sales specialists, but once you determine a fair price for the business, it’s important to consider a broad marketing and advertising program, whilst considering the merits of identifying your business or maintaining confidentiality throughout the marketing process, by only key advertising the attributes and profile of the business, whilst not identifying your business until a buyer has signed a confidentiality agreement. There can be advantages and disadvantages that apply to both approaches, so think about this before you start with your advertising.
The confidential marketing of a business without disclosing the location and name of the business and using a confidentiality agreement with interested parties safeguards confidential and commercially sensitive business or franchise information.
If you are ready to sell your business you need a great ad to attract buyers attention.
Check our guide below or compare our listing packages.
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