Selling a Business
A major reason owners enlist the help of businesses brokers is to gain the leverage of a professionally managed marketing program. Beyond posting your ad on the brokerage’s website, find out how else your business will be advertised by asking these questions.
Most business owners are so busy running the day to day operations of their business that they do not give ample time to the future sale of their business. Before selling a business there are many factors to consider and good preparation will maximise the return to the business owner.
In our 30 years of connecting business owners to new opportunities we have seen illness, changes to the economy and within industry, become determining factors behind the sale of many businesses. Within the SME market, the MYOB Business Monitor, found that only 39 per cent of business owners have an exit strategy, and are planning to exit their business on their own terms.
This is a common question many of our Brokers are faced with as they go to market with a new business. Of course there are issues that surround telling your staff that their place of employment is to be sold however, if done properly there can be a great deal of tactical benefits as well as easing uncertainty.
In 2008 New Zealand was just three years away from the biggest small business sell-off in the country’s history as the first wave of baby boomers prepared to cash-in their decades of hard work for well-earned retirement. In September 2008, when the Global Financial Crisis (GFC) hit, all those well laid plans for life after work had to be put on hold as business owners felt the impact of business profits suffering, and the value of their businesses retreating.
‘Ready for sale’ does not mean it has to be on the market at that time. It means that if an opportunity arose, or circumstances necessitated a sale, then the business would be ready to go and have the characteristics for which a buyer would pay a better than reasonable price. Business Broker Peter Nola discusses how to get more for your business at sale time.
Deciding to sell a business is the easy part - how to go about selling is another dilemma altogether. Selling a business is a complicated process that requires very specific expertise as well as the ability for the broker to solve problems in a practical, yet creative manner. Earlier in the year a business owner contacted me after they had unsuccessfully tried to sell their business to another party. They had been very frustrated by the whole process, and worst of all, there was no sale.