Selling a Business

The sale of your business is inevitable whether it be a financial decision or a personal one. Preparing the business for sale and completing the sale can be a long process.

It is important the business is always prepared for sale as personal circumstances may change and call for a quick disposal.

Many business owners wait too long before selling their business. As a result they only ever receive a fraction of what they could of achieved.

Some business fail to sell at all and are eventually closed down with little or no reward for the owners hard work and investment.

The best time to sell your business and see the best possible return on your time and investment is when the business is strong, profitable and future prospects are good.

The worst time to sell your business is when you have to due to personal or business problems. You may be suffering from burn out or business sales/profits may be in decline.

Several factors must be considered in order to achieve the best possible price:

• Cost of borrowing to finance the deal
• Number of prospective buyers
• Business outlook
• Structure of the sale
• Presentation of the business

A prospective buyer will have many questions to be answered before they would consider your business. Your main focus during the selling process is to ensure you have the answers and the relevant documentation to support what you say.

Many small business owners fail to document business processes or keep their records up to date. They are too busy running the business for paperwork.

A prospective buyer needs to be confident that they can run the business with little or no assistance. For this reason business processes must be documented and records of all transactions must be maintained.

If your business history is not properly documented and recorded, now is the time to do so.

The first question to be answered:

'How much is the business worth?'
One of the main reasons businesses fail to sell is because they are overpriced.

Some owners undervalue their business and sell for much less than it was worth.

The value of the business will be dependent upon a number of factors.

• How long has you business been established?
• What assets does the business have?
• What Market are you in?
• What is your share of the market?
• Who are your customers?
• What is your turnover?
• What is your profit margin?
• How healthy is your cash flow?
• What is your unique selling proposition?

This information is required to set and justify the asking price for the business.

'How do I sell my business?'
You should appoint a company or individual to represent you in the sales process. There are several options available but it is vital that you select the best representative for your business.

It is wise to keep the sales process confidential as your business is extremely vulnerable during this time. If word of the sale gets out the business can suffer, customers may be lost, suppliers may stop your credit and competitors may begin to poach your staff and loyal customers.

'What can Destination Commercial Property do for my business?'

Click Here to find out how we can help you sell your business