The process of selling a business can be quite daunting, time consuming and frustrating for many business owners. Amplify are committed to our objective of making the process of selling a business easier. Amplify have prepared a small number of tips for those selling their business, we hope they help you to get a better outcome.
For more information on selling your business and for a copy of Amplify Business Sales' 17 page guide - 'Preparing Your Business For Sale' contact Amplify on 1300 AMP BUS (267 287).
Tip 1. Every business should be ready to sell, at any time
Business is unpredictable, and so is your health. Business people should run their business so as to consider this unpredictability. To bullet proof your business you should run your business with clean books,
Tip 2. Be clear about your reasons for selling
"Why are they selling?" is usually one of the first questions a buyer will ask. The answer to the question is crucial. As a seller you need to be clear as to your reasons for selling. The buyer will find your reasons compelling and will want to know that they are legitimate.
Tip 3. Be Prepared
In an ideal world most small to medium sized businesses should begin to prepare their business for sale two to three years prior to putting the business on the market (this period may be longer for large enterprises). In this way you can prepare and make your investment and financial decisions with the upcoming sale in mind.
However, if you wish to sell and have not yet started to prepare, then as long as you have a good strong business, there should be a market for it.
Being prepared involves ensuring your contracts (with customers, staff, landlords and suppliers) are in place, are legal and at hand. These contracts should be ready and at hand for potential buyers conducting their investigations.
The best time to sell a business is usually when the business is growing and prospects for future growth are good. It is precisely these moments that most business owners don't want to sell.
It's also important not to give up on your business and lose your motivation once you have made the decision to sell. Many a business owner has regretted not making necessary investments in their business, simply because they have placed the business on the market. To maximise your final selling price you should always continue to make prudent investments, so that any prospective owner can see the business is being left in good hands.
Tip 5. Be honest and credible
As a seller you cannot engage in misleading or deceptive conduct, for example, make a promise that you cannot undertake or provide information that is inaccurate or could be seen as misleading. Furthermore, buyers are sensitive to anything that can be seen as 'risky'. A seller that is not credible, open and honest quickly put buyers in a position of unease and will be at the detriment to your chances of affecting a sale.
Tip 6. Remove or restrict the reliance on you as the owner
If you’re the owner and the business doesn't run well without you, because ‘you are the business’, then you’ll need to appreciate that this fact will not be attractive to any prospective buyer.
It has been said, “if your business can’t operate without you, then you don’t have a business”.
Tip 7. Choose the right marketing optionsChoosing the right marketing and advertising options have the following impact:
- Creates competition between possible buyers which can result in a better and higher sale price, or quicker sale.
- Invigorates buyers currently investigating your business to lift their momentum.
- Reaches out to a maximum number of potential buyers increasing your chances of a successful sale.