Selling Tips

Abelas & Co Business Brokers often advise Vendors that the task of selling a Business is not so straight forward as they might expect. Buyers will require a lot of information to be put into place before consideration of a Business.

Although this list is not exhaustive it should serve as a guide to what preparation is required when thinking of putting your Business on the Market?

Confidentiality
Confidentiality is of the highest concern for all vendors. Vendors shouldn’t disclose sensitive information relating to their Business to the next caller without qualifying them.

Inventory
Itemise exactly what is being sold and if possible make a list of all the equipment included in the sale.

Lease
Ensure your Lease is in place, the last thing you need to contend with when attracting Buyers is to find out that your existing lease is not adequate for the Business to be sold. Some purchasers will request a new lease or at least an option to be placed on it prior to entering into contracts in the event of the current lease having a short period until it expires.

Record Keeping
Ensure all claims about the profitability of the Business can be substantiated in black & white, any misrepresentations will result in the Buyer losing interest and walking away from the deal. Be responsible with your record keeping. Keep all of your purchasing receipts together, along with your sales history and be prepared to show these records to qualified purchasers..

Valuation
Avoid overvaluing your Business, also be reasonable with your Demands and above all be patient with the sale process. A Qualified Business broker will be able to give you a guide as to the approximate value.

Stock Valuation
For most Cafes or Takeaway Business this can be arranged between the parties involved in the sale as the stock value is usually quite small. For Retail Business such as Convenience Stores Discount Stores where the stock value can outweigh the Business value, you will require the services of a qualified stock taker. It’s ideal to use a stockbroker in the event of disputes in the value of stock.

Fixtures, Fittings & Equipment
It’s important that all of the fixtures & Fittings are in good condition. Keep the receipts for any repairs that have been made. While an expensive fitout will not directly affect the true value of the Business, it’s worth the effort of being well presented when Buyers come to inspect as a poorly presented Business will act as a deterrent making for a longer time to sell.

Marketing For Sale
With the advent of the internet, the way Business are marketed these days can involved a wider selection of avenues to follow. Be prepared to allocate anywhere up to 1% of your asking price into marketing your Business. Allow plenty of time for the marketing process, expect months rather than weeks for this.

Solicitor
A solicitor is not a legal requirement when selling or Buying a Business, however we usually recommend appointing one for the process to attend to any legally issues which usually arise during this process. Use only commercially aware Solicitors specialising in Business Law.

Choosing Your Broker
Never attempt to use more than one Business Broker when selling your Business, better to enter into an exclusive agreement where the broker is obliged to perform, whereas having open agreements with numerous brokers will result in less commitment from them and usually a lower sale price will result.

So Why Use a Broker?
A Broker will handle the sale from start to finish, give a market appraisal prepare a marketing plan, negotiate the conditions of sale, Arrange stocktaking, and create a process of confidentiality. Private Vendors may not be aware of the legal implications of selling a Business and quite often will save you more than their fees.

This article should not be taken as professional advice. It is strongly advised that you consult a professional Business Broker & Solicitor before undertaking to purchase a Business.