People who have sought to sell a business before understand what kinds of challenges and opportunities exist for owners.
While some enterprises are more attractive propositions than others, there will often be a number of interested parties who are looking to secure an existing property for a fair price.
Instead of making poor assumptions and falling for the same mistakes, it is beneficial to see what experience has told those individuals to shape the advice they pass on.
We will take note of the key tips that are outlined when looking to sell a business.
Make Peace on the Reason to Sell
If there is one key takeaway that experienced practitioners will outline when they seek to sell a business, it is the need to make peace with the decision itself. The motivations are rarely the same from one owner to the next. Others are simply looking to maximise their value and use those funds for a brand new opportunity. Others are retiring. From upsizing to downsizing, it is beneficial to reflect on the motivations because they can inform the selling process and where the parameters are regarding finances and timeframes.
Securing Independent Valuation
There are a number of industry specialists who will be able to reach an independent valuation for those members wanting to sell a business. Whether they are accountants, lawyers or agents, there are professionals in this domain who run the rule over an enterprise and assess the valuation with stock, with goodwill and any other factors that might act as the start of a bidding war. Instead of relying on staff members, friends or close contacts within the inner circle, this requires outside intervention in order to be accurate and independent.
Reflecting on Timing of Sale
For local owners who are making the decision to cash in on their business venture, the timing can be just as important as the valuation. That required capital might be needed for other ventures that have to be scheduled. The same issues surrounding businesses that are seasonal ventures as summer and winter months might be more viable. Consult with all necessary stakeholders around the timing because then participants can work backwards.
Having Documentation Prepared & Secured
When they say the devil is in the detail, this can very much apply to those wanting to sell a business. Tax returns, balance sheets, profit and loss statements, business activity statements (BAS), lease agreements, asset lists and more have to be involved in this process. Experienced operators realise that these elements have to be prepared and secured ahead of time rather than expecting them to fall into place at a later stage.
Seeking Contingency Buyers
It is amazing how often a buyer suddenly finds an excuse to pull out at the final stage. For whatever reason, the need to sell a business will introduce a number of interested parties and while discussions might appear positive and productive, nothing can be guaranteed until a pen is applied to paper and that paper is lodged and certified. This is where contingencies should be sought and contacts retained, ensuring that nothing about a potential deal is disclosed until an agreement is reached, allowing sellers to keep multiple options in play.
Consulting With a Trusted Broker Service
Operators who want to sell a business may very well decide to lean on a brokers service to entice interest from the outside and to maximise the sales price. However, there are fees involved in this regard and if there is already word of mouth established, perhaps that is not the ideal route to take. With this being said, it does help to arrange a consultation with them to help confirm certain details, to discuss opportunities that might not have been considered and to cross-reference information in the event that wrong assumptions are made about the process.