What can help sell my business
When you offer a business for sale there is several things a potential buyer will ask.
- Why are they selling
- Is there any hidden expenses
- Are the figures genuine
- Is the operational side of the business up to speed
Addressing these type of issues either visually, documented or demonstrated will install a higher degree of confidence with the buyer.
Why are they selling
The reason behind offering the business for sale is one of the most important questions that will get raised. If you are selling to retire for example installs a lot more confidence than an urgent sale due to vendor has new interests. This may suggest they are getting out while they can. Whatever the reason, you need to be genuine as to why the business is for sale.
A few things that may install confidence that you believe in the business for sale include.
- Post settlement support or consultant agreement
- Retention of funds with a performance contract
- Vendor finance in part
- Trial period
Is there any hidden expenses
Is the buyer going to be hit with expenses that they were not expecting such as a new industrial fridge, or a new fit-out due in six month’s time according to the franchise agreement.
You can address some of these items up-front in the following way
- Stand back and look at the business. Clean up the clutter and presentation
- Spend some money on paint and furniture if it is looking tired
- Complete a capital expenditure forecast for the business showing when assets are expected to be replaced
Are the figures genuine
Presentation of figures should be clean, correct and timely. A good accountant is going to pull them apart and benchmark them for accuracy.
Have your financials reviewed and get them current. You may want to consider.
- Remove abnormal expenses (such as the family car), but have your accountant document these changes as your tax return will differ from the financials
- Have the previous financial year completed in a timely manner
- Keep your accounting and BAS up to date monthly to allow prompt accurate interim financials
- Demonstrate that you are using a system like QuickBooks or have a bookkeeper engaged
Is the operational side of the business up to speed
It is important that a business is running smooth and easy to take over. Demonstration of process, control and contingency install confidence.
You may want to consider things such as.
- Debtor and creditor collection days and process
- Maintenance schedules
- Staff job description, contingency and planning
- Data back-up
- Marketing budget and planning
- Sales forecast
- Operational guides and processes