Exploring your business sale options
Selling a business is not something you do every day, in fact it could well be something you do only once in life. It is therefore understandable that you may be confused as to your next steps once you have made the decision to sell up and move on. There is much to think about, and it goes without saying that any decisions you make at this stage should be considered carefully. As an initial step you need to decide on your expectations when it comes to price, and whether you are working towards any specific time scales for completion.
One of the crucial decisions at this early stage is whether you are going to employ the services of a BUSINESS BROKER to help facilitate the sale, or whether you are going to go it alone(DIY). While it is perfectly possible to organize the sale of your business yourself, before going down this route you should be aware of the complexity of the process and the obstacles you could encounter along the way. Selling a business is rarely a quick and easy process, so should you opt for the solo option, you should be prepared to dedicate a significant amount of time to getting the deal over the line.
As selling your business is something which is vitally important to get right, you may instead wish to consider enlisting the help of a BUSINESS BROKER. The BUSINESS BROKER can help you when it comes to setting a realistic selling price, negotiating with potential buyers, and dealing with the legal aspects of the sale.
Length of business sale process
There is no set time for how long it will take to complete the sale of a business. This is determined by a multitude of variables such as how desirable your business is and therefore how long it will take to find someone wanting to purchase it, how quickly you can agree on price and other terms, and whether the due diligence procedure highlights any issues. However, you should be prepared for the fact that selling a business is often a lengthy process and typically takes upwards of six months to complete. In rare Cases few Businesses gets sold under 60 days provided if the following things are practical , the Asking Price, Documented P&L, No Liabilities on the Business and Assisted by an EXPERT BUSINESS BROKERS.
If not, you should not be surprised if it takes anywhere between six and 12 months for the deal to go through. Having realistic expectations of how long the process could go on for could save you frustration and disappointment further down the line.
While a sale could stall for many reasons and at any stage in the process, there are certain things you can do to help it move as quickly as possible. Before putting the business up for sale, it is advisable to spend some time collating the financial information of the company, such as previous accounts and cash flow statements; these documents will be needed during any sales negotiation so it makes sense to have these available and ready.
One of the most time consuming parts of this business is finding someone who not only wants to buy your business, but someone who is also in the position of actually being able to do so. Enlisting the help of an adviser could help to speed up this aspect of the process considerably. An experienced adviser will have a database of potential buyers and will know the best ones to contact who may be looking to purchase your kind of business.
Preparing your business for sale
When it comes to selling anything, be it a house, a car, or any other personal possession, you want it to be in the best condition possible in order to maximize your returns. Selling a business is no different. While sales preparation may not ultimately increase the value of your business, it may well increase the attractiveness of it to potential buyers. Here are some things you can do to get your business in top selling condition:
- Get your financial affairs in order – It is inevitable at some point of the sales process that a buyer will want to scrutinize the financials of your company before deciding whether it is a worthwhile investment so getting this prepared early will not only save you time in the long-run, but being able to provide this information in a timely manner will also be appreciated by your prospective buyer.
- Appearances matter – If you operate from a fixed premise, make it look as attractive as possible. Give the place a lick of paint, fix weathered signage, and consider updating any antiquated machinery.
- Get a trustworthy valuation – Knowing how much your business is worth and working out your expectations can ensure you are pitching your business to the correct sort of potential buyers.
- BUSINESS BROKERS– a BUSINESS BROKER will cost you; however, chosen correctly, the right adviser could prove to be extremely valuable. Selling can be a very stressful time, particularly when you still need to remain focused on running the business to the best of your ability. An adviser can help take the stress out of the process by marketing your business to genuine interested parties, handling the negotiations, and overseeing the legal aspects of the sale.
While selling a business is typically a lengthy process, employing the services of an adviser could see you completing on the sale quicker than if you went it alone. Often the most time-consuming part of selling a business is finding the correct buyer. However, an experienced adviser will already have a database of potential buyers lined up and will know exactly how to market your business to them in the most effective way.
Conducting a company valuation to establish market value
Valuing a business is notoriously difficult. While some companies will be happy to put a value on your business based on generalizations such as the sector you work in, it is only through a thorough examination of your specific business that an accurate valuation can be given. While your current and historic financial performance, the sale prices of other comparable businesses, and the health of the industry you operate in, can lead to a valuation being given, you should always bear in mind that a valuation is just an estimate; the true value of your business is ultimately decided by the buyer.
While receiving a high valuation for your business may well be flattering, it is important to have realistic expectations of what your business could hope to achieve. By placing your business on the market at an inflated price could deter those who would be interesting in purchasing for a more realistic price, and could also lead to disappointment when you inevitably have to lower your expectations to complete on a sale
Benefits of using a BUSINESS BROKER
When selling your business, you can either arrange the entire sale yourself or you can enlist the help of a Professional BUSINESS BROKER. You need to decide which the best option is for you and your business by weighing up the pros and cons of each approach.
- VALUE ADDITION : A BUSINESS BROKER will cost you; however, chosen correctly, the right adviser could prove to be extremely valuable. Selling can be a very stressful time, particularly when you still need to remain focused on running the business to the best of your ability. An adviser can help take the stress out of the process by marketing your business to genuine interested parties, handling the negotiations, and overseeing the legal aspects of the sale.
- QUICK DEAL: While selling a business is typically a lengthy process, employing the services of a BUSINESS BROKER could see you completing on the sale quicker than if you went it alone. Often the most time-consuming part of selling a business is finding the correct buyer. However, an experienced adviser will already have a database of potential buyers lined up and will know exactly how to market your business to them in the most effective way.
- GREAT APPRAISAL : As selling your business is something which is vitally important to get right, you may instead wish to consider enlisting the help of a BUSINESS BROKER. The BUSINESS BROKER can help you when it comes to setting a realistic selling price, negotiating with potential buyers, and dealing with the legal aspects of the sale.
Business valuation is the process of determining the fair market value of a business, or in simple terms, the true worth of a business.
Unrealistic valuation is one of the major reasons why good deals fall out
Get what you deserve in a transaction by knowing the real worth of your business
Quote realistic valuation for higher chances of gaining buyer/investor confidence
For Sale by Owner (FSBO) is a method of selling a business without the use of a business broker. Small business owners may employ online listing/advertising services to market their own business but do not pay a commission and represent themselves without the help of a business broker throughout the sale. BIZQUARTZ has designed BASIC LISTING (DIY) for those owners who wish to SELL BUSINESS without the help of BUSINESS BROKERS.
If you are able to plan your exit from the business over a period of time we would advise that you make the business as profitable as it can be, this will help to increase the value of the business. Other things which are much simpler will help us to get the best price such as ensuring things are kept clean and tidy when photos are being taken or when viewings are taking place. Additionally it’s a good idea to ensure that everything in your business is in order and being fully utilized, for example social media, customer reviews, processes and procedures. Think as a buyer would do and try to cover off everything you would expect to find as a buyer.
It’s never our intention to send buyers to you who are not serious. We obtain their contact details and ask them questions about their experience in business and ability to purchase the business from a financial point of view. We take this information in good faith and will relay this information to you. We will also ask purchasers to be ready to provide their proof of funds in conjunction with an offer.
In effect, if you purchase the Freehold Fixtures & Fittings and Goodwill you will own the property as well as the business. If you purchase Leasehold you will own the business and fixtures and fittings and the right, usually for a given period, to occupy the business premises for an agreed rent.
Gross Profit is the profit after the stock has been paid for - takings less purchases.
Net Profit is the profit after all other expenditure has been deducted and is the money the business has made for the financial year.
BIZQUARTZ BUSINESS BROKERS CHARGES 5% OF THE TRASACTION VALUE FROM BUYERS SIDE.
BIZQUARTZ BUSINESS BROKERS CHARGES 5% OF THE TRASACTION VALUE FROM SELLERS SIDE.
Depending on the Complexities of the Business, The Former Owners will Offer Varying levels of Training. On most of the Small Business Cases the Owner will offer a transition handover time or a week or Two.
As part of the acquisition process you will have to go through “due diligence.” During this period the seller is required to present documents to verify his profit numbers as well as any other information you request. Also it is recommended to all the Buyers to consult professional Due Diligence Service Providers to safeguard your interest before concluding any Business Transaction.
The main benefit of buying an existing business is all the legwork has already been done. Getting a business off the ground is often the riskiest and most difficult stage of any new business venture. It is safer and more profitable to buy an existing business than start a new one. According to the Small Business Administration, more than 50% of startup businesses fail due to unproven concepts, lack of working capital, and poor management.
Some other advantages in acquiring an existing business include:
The ability to review a company’s existing track record substantiated by profit / loss statements, tax returns and other financial records.
Growth potential can be measured based on actual experience rather than conjecture associated with startup ventures.
The need for additional working capital is reduced due to the immediate cash flow already being generated by established customers.
Skilled employees who are familiar with the business operation are already in place.
Existing licenses and permits can often reduce the time and cost of making application, gathering information and conforming to required regulations.
Location / demographics have already been market tested & proven.
Pricing and competition are already known quantities.
Policies and procedures are in place.
Established suppliers / vendors are already in place.
Established relationships with professional advisers, insurance companies, advertisers.
Furniture, Office Machines & Communication Equipment is in place.
Established market presence, such as a website, is already in place.
Yes. For PRREMIUM CLIENTS Bizquartz guides and works closely with business buyers and sellers right from the listing to the transaction.
Seller - refers to an individual / group interested in selling their business fully or partially.
Buyer/Business Investor - refers to an individual / group interested in investing funds in a company in lieu of shares / part of the company.
Account Manager - refers to the dedicated resource assigned to the premium client.
Business Consultant/ Business Broker - refers to an individual / group who are working on behalf of a third party as their representative to help them buy / sell business/s. ( for example: Consultant, Investment Bank, CA, Advisory firm or any other party involved in such activities as described above).
Listing - refers to the brief created by / for the registered user. This user can be Seller or Business Consultant/ Business Broker. The brief includes a description of the business along with some basic financial information or any other data / information shared by the user
Business Teaser - refers to documents and templates used for the purpose of sharing Business information.
Business Wanted - refers to the Specific type of business an individual / group is looking for. Type can be defined in terms of industry, revenue, nature of business, location etc.
Dashboard - refers to your personal space on the website where you can view / edit your listing, check / reply messages, upgrade to our premium services and other activities.
Due Diligence - refers to checking and verifying the information provided by the seller / buyer about the business from all aspects, before closing the deal. Please note that https://www.bizquartz.com/ does not provide this service but can connect you with such service providers when requested.
EBITDA - refers to earnings before interest, taxes, depreciation and amortization
Gross Profit - refers to the cost of goods sold deducted from the total revenue received.
Lease a business - refers to leasing / giving up or taking up certain operational and legal rights of the business for a set period of time to / from a third party to run it as his / her own.
NDA (Non-Disclosure Agreement) - This kind of document is signed between two parties so as to ensure that the information disclosed is kept confidential. Please note that violating NDA can and/or will result into a legal matter.
Types of Business sale:
Full - refers to the sale of entire business, along with all its assets and liabilities
Part/ Partial - refers to the sale of business where only certain Shares of the business are sold .
Asset - refers to the sale of only the assets of the business, the business buyer does not have to worry about any liabilities that the business seller might have had. The business buyer can either take over the company with its current identity or create a new identity and transfer all the assets to it.
Equity - refers to the sale of company shares and not the assets. The only change that occurs is in the ownership structure.
Should you have any additional frequently asked questions about Selling , Buying, Growing a company or business brokers, please don't hesitate to contact BIZQUARTZ BUSINESS BROKERS,