Selling a business is not a decision that business owners take lightly, but it is a sound option when you have built it to a point where you are earning consistent profits, as it’s better selling when the business things are on the way up, rather than on the way down. In today’s financial market however, there are some other challenges in selling your business!
Any problems in selling a business and gaining the best possible sale price can often and usually be avoided by doing your homework and by being prepared well in advance of placing your business on the market. So here are our best tips to help you avoid the 4 most common mistakes made by most business owners, when selling your business.
Not being realistic: Many owners have a set value in mind for their business and won’t sell for a dollar less. Being overly optimistic about the market value of your business can be a normal reaction at first, but sound advice and an objective evaluation should soon help you to become more educated on what is possible and what is not. Therefore, one of our essential tips that will help you to market your business successfully and achieve your goal of selling within a reasonable time frame is to consult a Registered Business Valuer (RBV) or a Certified Practicing Business Broker (CPBB), as they know what the market is actually doing and what businesses are selling for today.
Not being prepared: When selling a business, potential buyers will need to see all of your financial information before they go to contract. Your accountant will need to be on board here, because buyers will want at least the last two years tax returns, profit and loss statements, stock balances, employee information, Plant & Equipment values and a copy of the lease on the premises, as a minimum. This is the second of our tips that will prevent you from wasting your time and money marketing your business, before you are really ready to sell your business.
Not asking for help: Selling a business requires assistance from someone with years of experience in the profession, someone who is professional and structured, follows due process in their approach and has a reputation for making many successful sales. So make sure to interview a variety of business brokers, and find the one that resonates with your mindset, and look for brokers that don’t cut corners. As selling your business, the one which you have built up over several years is a serious business and should be done correctly. It’s also a good idea to consider those who are members of an industry body, which follows a code of conduct, such as the Australian Institute of Business brokers (AIBB). This is the third mistake on our list of hot selling tips, and we hope it prevents you from hiring an inexperienced broker who promises you a fat price, but doesn’t deliver.
Not engaging in the sale: Unfortunately, too many business owners hire a broker and then take a leave of absence, figuratively or literally. It’s important to equip your broker with all the intimate knowledge you have of your business, which in turn helps your broker pitch your business to prospective buyers. Being engaged in the sale process helps you to seal the deal by demonstrating to buyers that your business will still be popular and successful, even without you at the helm.
Selling your business does involve a number of well thought out essential steps, finding the ‘right help’ and ‘being prepared’ are two of the best tips for a successful sale. For assistance selling your businesses, call us on 07 5479 5588 or complete our online enquiry form.