Sell Your Business

Most owners do not consider selling their business when it is doing well - they wait for a crisis. Selling is fraught with danger and many businesses sell (or just close down) for less money than they could have achieved in happier times. Crises can be caused by a multiple of factors like new competition, erosion of capital, poor health, divorce, absence of management evolution strategy, sudden industry downturns, stock or debtor issues and a multitude of others - including the economy as a whole.

Timing is crucial in achieving the best selling price, as is knowing the value of your business in the current Market at any one moment in time. Understanding Sales cycles and Industry trends are important indicators which can also help you create a strategic exit plan that will maximise your companies value.

An experienced business broker will assist you in looking at economic cycles and planning the best time to sell. They will also give you a realistic guide to the market value of your business.

Every business owner (at some point) eventually decides to exit their company. How and when is best, can only be determined through planning, timing, knowledge and a thorough understanding of your company's market value at the time you decide to sell.

Don’t put yourself into a situation where you are forced to sell for less that you should. This can be avoided. Plan ahead, and maximise value, and reduce stress. It’s easy.

Why should you consult a Business Broker?

Selling a business is a specialised complex process that requires considerable experience in a number of areas. Just as you send your legal work to your lawyer and your accounting work to your accountant you should seek professional advice and assistance when it comes to selling an asset as important as your business.

In addition to the considerable time spent in interviewing and qualifying buyers which detracts from the time spent by the owner in running the business so that the business continues to perform at optimal levels (a key factor in determining the eventual sale price) is the difficulty in maintaining security over the confidential nature of the business sale.

Business values can be adversely affected if Key Employees, Suppliers or Customers find out that the business is on the market which can often happen when Owners deal directly with Buyers.

Experienced Business Brokers are an excellent source of information about the business buying and selling process. They can advise you on current market trends, pricing and local issues – and how to sell for maximum vale.

Business brokers generally have a network of allied professionals and can, in addition to handling most of the details of the business sale (including dealing with the prospective buyer's lawyers and accountants), guide you or a motivated buyer, in the right direction to tap in to their contact base if the need arises.

During the Selling process it is the Brokers job to Confidentially market the business by Advertising the business, finding and screening and evaluating buyers, educating them in all aspects of the business, negotiate the price and terms of sale to be acceptable to the Seller, facilitating the flow of information between Lawyers and Accountants and provide a buffer for the emotional highs and lows that come with the life changing decision to sell.

Whilst the Broker works for the Seller of the Business to maximise the sale price, both Buyer and the Seller benefit because the Broker has pre-qualified the business before listing and should know almost as much about the business as the owner. This helps motivated Buyers who have been pre qualified by the Broker (for financial ability, capacity to run the business and intent) to make a well informed decision on their level of interest in the business.

The Broker should have also prepared an in depth Memorandum Of Information of the business and be aware of most if not all aspects of the business operations including the financial implications of the business for confidential discussion with Buyers.

What Factors Determine the Value of your Business?

Most buyers will be attracted to your business by how closely it fulfills their needs and the opportunity for growth that they see in the business. However, they will value the business on how much profit it makes now. Few buyers will pay large amounts of goodwill for potential profits that may not materialize.

Most businesses are sold on a multiple of the earnings capacity of the business. The earning capacity is then multiplied by a figure that recognizes the "risk" and the opportunity for the new owner. You will hear this talked about by accountants in terms of "Capitalization Rate", "Return on Investment" or sometimes "Earnings Multiples".

How to Maximise the Price Paid for your Business

Have a broker assess your business for the 17 areas of risk. Once these areas have been identified, and the accounts recast, you can assess what needs to be done to maximise sale value. This can make hundreds of thousands of difference to your bottom line when you sell.

Qualifications

All Benchmark Consultant Brokers are Licensed and. Benchmark Consultant Brokers regularly attend training and refresher courses at the Australian Institute of Business Brokers in order to keep abreast of legal and legislative changes and ongoing requirements. As such we strictly abide to the Code of Conduct for Agents laid down by the AIBB.

We offer our clients the following services as part of the Selling process:

Confidentiality from Staff, Suppliers, Competitors and Customers.
No Obligation Business Assessment
Current Market Status Report
Pricing Advice of Business/Property Sale
Creation of a Professionally presented Confidential Business Profile
Design and Implementation of a unique 3 Phase Marketing Plan
Qualification of all Buyers for Intent, Ability and Financial Resources
Arrangement and Tutoring for Business Inspections
Management of the Buyer through Negotiation of Terms, Contract Preparation, Due Diligence, Financial
Approval to successful Settlement