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1 Set a Goal Price

Define clearly what you want now for your business and what you will want for it at a future sale date. This is your Goal Price.

2 Make a Plan     

Develop a proper written Plan for how you intend to achieve this goal price.

3 Consult an Expert

Get a qualified person such as a registered Business Broker. Ask him  to prepare an Appraisal Report on your business. This will highlight the strengths and exclusive selling points of your business and its risks. It will also provide you with an Asking Price. Talk to your Accountant about a tax minimisation strategy.

4 Financial Accounts

Ensure your Financial Trading and Profit and Loss Accounts are always up to date.

5 Identify Key Issues

Such as key staff.Who will be taken over by the new owners and who will not. Supply Contracts-do these need to be secured for the future? Lease-does this have attractive renewal options or any assignment restrictions? Customer Spread- Dependency on just a few key customers?

6  Identify Potential Prospects or Buyers

Consider key staff or other shareholders or partners. Consider competitors as prospects as well as business migrants.

7 Define Exit Marketing Plan

This includes all the above as well as setting a final Price and a Date. Engage a specialist registered Business Broker.

8 Cultivate all Prospects

Work with your Broker to create an interest in your business for all prospects. He will introduce competition and assist with negotiations within the time frame. This will get the best price with minimum business disruption in the shortest time. You can get between 50% to 100% MORE more for your business with a proper exit plan. You then leave the business on your terms and are always prepared for offers.

Did you find this useful? Contact me for further information.

Nick Benwell ACA Corporate Business Broker  M 0402 815 005  This email address is being protected from spambots. You need JavaScript enabled to view it.

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1 Business Brokers sell over 95% of all businesses.Why?

                                             With skilfull marketing they find buyers,negotiate and close deals.

                                             This gets you the best price in the shortest possible time.

2 Brokers have Lists of Interested Buyers. A private seller does not.

3 Brokers Create Competition amongst Buyers.

                                               About 50% of buyers come via the internet. But brokers have lots of other

                                               business sources to find buyers to compete on price to get the best results.

4 Brokers Know the Market. They deal daily with buyers and sellers,Private sellers dont.

                                              Brokers have to work on the deal long after the  sale is made

                                              and sort out any problems.

5 Brokers have Negotiating Skills.This is vitally important.

                                               Most sellers are emotional about selling their business.

                                               They may have unrealistic expectations and limited negotiating skills.

6 Brokers are Experienced. They have hundreds of sales and know all the pitfalls.

                                             Most private sellers have never been through the process before.

7 You do not Save Money.   There is no evidence that  selling privately saves money.

                                             Brokers through their marketing skills will price the business properly

                                             and attract genuine buyers and get a higher price.

8 Brokers have lots of Websites. Not only their own but many others to sell businesses.

                                              They will skilfully write appealing postings and process all responses.

                                              This will save everyone time by cutting out "tyre kickers" and nosey competitors.

9 Brokers Assist with Finance. Many Buyers need assistance with finance.

                                                Plenty of deals fail at the end due to insufficient finance.

                                                Brokers have excellent contacts with Banks and Finance Brokers.

                                                This ensures a smooth conclusion to the deal.

10 Brokers have no Conflict of Interest. Many buyers dont want to deal directly with Sellers.

                                              They like to negotiate with an experienced third party to avoid conflict.

11 Buyers Remorse.             The deal is not done until the money is in the bank! Many Buyers get remorse.

                                              Brokers know how to handle this, Private sellers do not.

                                              They know how to manage this and all the steps right up to settlement.

12 Sellers Stress .                Selling your business after many years can be very stressful. Why not avoid this?

                                              An expert Broker will help you navigate the sale and make it an exciting experience.

                                           DID YOU FIND THIS HELPFUL? CONTACT ME FOR FURTHER INFORMATION

                              Nick Benwell  ACA  Corporate Business Broker   M 0402  815 005   This email address is being protected from spambots. You need JavaScript enabled to view it.

                                          

1 Establish a reasonable Asking Price.Inflated expectations can delay the Brokers ability

                                        to get you the best price for your business in the shortest time.

                                        At Elliscorp you will get a Free Business Appraisal Report and suggested Asking Price.

2 Carry on Business as usual.

                                        Dont get so obsessed with the transaction that you neglect the business so that this

                                        effects sales,costs,and profits.The selling process can take months and the Buyer

                                        wants to see a healthy business.

3 Keep Things Confidential. Expert Brokers  will ensure confidentiality for both parties.

4 Prepare for the Sale well in Advance

                                          Get your financial accounts and records for at least 3 x Years well up to date.

5 Anticipate the Buyers Requirements.

                                            To get finance the Buyer will need appraisals on the Assets,Trading and Profit and Loss

                                             Accounts ,lease details to present to the lender for cash flow purposes.

6 Create Buyer Competition.

                                             Work with your Broker as a third party to create a competitive situation amongst the

                                             the Buyers to get you the highest price in the shortest time.

7 Be Flexible.                       Dont demand all cash at settlement without negotiating.

                                             You may have to consider some vendor finance.

                                             Get advice from your Broker and Accountant.

                                             Their knowledge of getting finance  and tax is vital.

8 Negotiate dont Dominate.  You may be used to being the boss. But the Buyer may also be.

                                              Your Broker will advise you on  when to "hold" and when to "fold"

9 Dont let Time Drift on the Deal;

                                            Work with your Broker,Accountant and other experts to ensure everyone sticks to

                                            the time schedule.

10 Stay Involved in the Business. You may be tired but the Buyer may want you to be accessible for a period.

 

                                      DID YOU FIND THIS HELPFUL? CONTACT ME FOR FURTHER INFORMATION.

                                             Nick Benwell ACA     M 0402 815 005      This email address is being protected from spambots. You need JavaScript enabled to view it.

 

                                              

                                        

                                       

 

 

1 Stamp Duty.Payable on Goodwill and  Plant. From 1.9% to 5.15%(Sliding Scale)

                      No stamp duty is due on Motor Vehicles or Stock.

                      Stamp duty also  payable on Finance Agreements eg,Loans,Hire PurchaseAgreements,

                       and Financial Leases.

 2 Adjustments to Rents,Rates,Land Taxes etc (Usually Prepaid by the Vendor)

                      Buyer will compensate the Vendor for any unused portion of the above.

3 Settlement Agents Fees;

                      These are paid by both Seller and Buyer.Normally on sliding scale.

                      For example based on sale price of $100,000,Seller will pay $960 and Buyer $1440.

                      Allow extra for incidentals.

4 Stock Taking Fees:

                      Independent stocktaker charges normally split 50% each to both parties.

                      Charges will  vary from minimum of $1500 up to 2.5% of the  cost value of the Stock.

5 Lease Negotiation Fees

                      Charged by Managing Agents for arranging new or assigned leases

                      Charges vary from 8.5% of annual rentals upwards.

6 Legal Costs; eg Settlement via Solicitors

                      Usually higher than Settlement Agents Fees mentioned above.

                      Other costs include preparing new leases $500-$1000 or lease assignments $500

7 Loan Application Fees eg Borrowing from Financial Institutions

                     For valuations,legal costs,stamp duties etc. Buyers should allow $1000-$2000

8 Bonds-For Electricity Connection etc Allow 2 x months electricity charges

9 Professional Service Fees- Accountants.Lawyers,Advisors etc .Allow up to $2000

             DID YOU FIND THIS HELPFUL? CONTACT ME FOR FURTHER INFORMATION

                             Nick Benwell ACA  M 815 005   This email address is being protected from spambots. You need JavaScript enabled to view it.

                     

                     



To make a successful sale,sellers should try to view the process from the buyer's position as different thoughts run through the minds of intending sellers and prospective buyers.If you anticipate the questions,concerns and issues that a buyer may have, then you maximise the chance of a successful sale.

From the Sellers Perspective

  • How will I let the marketplace know that my business is for sale?
  • Which target market will I pitch the sale to?
  • How much information about my business should I disclose?
  • How much should I ask for?
  • How low will I go on price?
  • What exactly do I want  from this sale?

From the Buyers Perspective

  • How will I go about finding out what businesses are for sale?
  • Should I buy this business?
  • Is it too risky?
  • How much information about the business can I get?
  • How much should I offer?
  • How high can I afford to go in price?

Know your Buyers

  • Different people buy businesses for different reasons.Does your business offer what potential buyers might be looking for?
  • Most commonly a buyer is looking for the ability to earn a good living from the operation plus the freedom and challenges that come with owning a business.
  • Alternatively the buyer might be an investor and so the profitability and rate of return will be the key element in the sale.

You might see opportunity in selling to a competitor who wishes to increase the size of their operation.If a number of competitors are looking to corner the market, your business may suddenly become highly prized!

Knowing how potential buyers think will help you position the business and highlight its outstanding attributes.

Positioning the Business For Sale

  • By knowing prospective buyers,you can position the business in a way that appeals to them.
  • This is the marketing exercise you do to make the business stand out for the potential purchaser.
  • The positioning exercise can start by promoting unique aspects of the business or special conditions.
  • For example if a restaurant is being sold and the only interested parties are would be operators without experience,their uncertainty can be alleviated if the seller promotes their offer to stay on in the business for some time after the sale.
  • Make use of relevant professionals to improve your business for sale.For instance get an expert to check your financials and a lawyer to check your
  • Contracts and legal issues. A more professional image makes the sale simpler and increases the chance of a sale.

Need Some Help?

                                                  Please contact me for further information

                Nick Benwell ACA           Mob 0402 815005  This email address is being protected from spambots. You need JavaScript enabled to view it.

Before deciding to sell your business, you should ask yourself these questions;

  • Am I ready to sell?
  • Have I considered options other than selling(such as becoming a silent partner or bringing in outside management?)
  • Will family members support my decision to sell?
  • Do I want freedom, away from the responsibility of running my business ? eg to pursue other business interests or spend time with the family?
  • Is the timing right? eg could the market and sale price be better if I waited? Is my professional development on track?
  • Will the sale benefit me financially?
  • Will the sale leave me free to earn my living, or will I be restrained from trading eg  a restraint of trade clause in the condition of sale?

If the answer is "yes" to the above then you are ready to start planning the sale.


WHY, WHAT, WHO and WHEN

Planning is essential for selling a business successfully. Planning involves making specific decisions about why you are selling,what will be sold,who will it be offered to,and when to offer it.


WHY ARE YOU SELLING?

Businesses are bought and sold every day,and there are many explanations for a sale  eg; Ive decided that its time to  move on to the next phase of life.

  • I want to do something different
  • Im planning to retire
  • Im going to spend more time with my family
  • I want to sell the business to someone younger
  • I want to sell it to someone who has the resources to make it even more profitable
  • I have health issues to deal with.

Your answer needs to convince a prospective buyer. Buyers will respond more favourably to genuine answers and consistent reasons


WHAT IS BEING SOLD?

You should be very specific about what is being sold. Selling a business differs from selling say shares in a company.

  • If you have run the business under a company structure, buyers will be mainly interested in your business assets and operations, not the company itself. And selling a company does not just mean selling the business. It also involves disposing of all its debts and liabilities, such as outstanding loans, overdrafts, taxation, trade creditors current orders and other issues like non compliance with statutory requirements or complaints by previous customers.
  • If plant, machinery and equipment are part of the sale clearly itemise the assets owned by the business that will form part of the sale. 
  • List identifying serial numbers.Obtain details of the costs of each item and the written down depreciated values from your accountant

Will the Property be part of the Sale?

  • If you are the owner of both the business and the property(often referred to as the "freehold") you need to decide if you will include the property in the sale.. If the property is not included,the selling price will be more affordable so you will attract more buyers. But location may be the main attraction.


WHO MAY BUY IT?

  • Businesses are frequently handed over to family members.Some may expect the first right of refusal for purchase of the business. Employees of the business are also potential buyers.Decide if the business will be offered to management,staff,or family before engaging a business broker orplacing advertisements in the general media.


WHEN TO SELL IT
?

  • As a general rule, the best times to sell are when the business and your customers or clients are peaking and the industry is likely to attract great interest. Also make sure any key contracts such as your retail lease agreement are not too close to expiry.


NEED SOME HELP?

  •                                                      Please contact me for further information.

                                   Nick Benwell  ACA           Mob 0402 815005                This email address is being protected from spambots. You need JavaScript enabled to view it.

If you are thinking of getting a temporary caretaker to run your business for a while think about these points;

Contingency planning

What ever the reasons are for engaging a business caretaker or locum, be it to go on holiday,or because of a medical or other emergency such as a  sudden family crisis,do your research first. Where to start?

Use experts to find the right person

Getting a caretaker is  a serious step. You will be putting your trust in this person to take care of  your business so that it keeps running efficiently and

profitably. It is not a matter of simply employing another member of staff. Handing the job to an employee is not always wise.Who will do their job while they cover for you? If they can?  And why should they know about the confidential workings of your business?

Rather consult an expert like your accountant or lawyer or business adviser who will guide you to a suitably qualified business caretaker.

Create your Critical Information List

This is exactly what it says. It lists all the most important things about your business so that your business caretaker can access vital information while you are away;

  • Business Details; Business Name,Australian Business Number(ABN) Tax File Number(TFN)
  • Business Personal Details; Directors, Partners, Accountants, Lawyers etc
  • Business Bank Details; Bank,Account No; Loan arrangements, Person to contact etc

Many other things like insurance company,property lease,rentals,important staff members and many more,

Before engaging a Business Caretaker;

Ask for a Letter of Engagement. This will outline exactly what duties you expect him to perform,the period of engagement and the fees to be paid and other services such as sending periodic progress reports to you while you are away.

Send both this and your Critical Information List to your accountant so that he can monitor performance on your behalf if necessary.

Organise meetings with people who will be immediately affected by the change to a caretaker eg business partners,bank managers,suppliers and key customers and clients.

Finally, call a staff meeting,explain why a caretaker is needed, specify the period and ask them for their support while you are away.

Handover of the business;

Get position descriptions for all critical staff so that both they and the caretaker are aware of individual responsibilities.

The above information is far from complete but simply provides some guidelines to consider when engaging a business caretaker.

For further information on any of the above eg examples of Critical Information Lists or Letter of Engagements please contact;

This email address is being protected from spambots. You need JavaScript enabled to view it.  or www.businessmindersperth.com.au  Mob 0402 815005 

How can I hand it over to someone I don’t know, even for a short time?

This is a comment that we receive almost daily. Its only natural! You ‘re unique. Right?

But what are your options if you never get a break? Day in and day out. Exhaustion? Health issues? Poor family contact? Or even worse? Put yourself first for a change . Everybody is replaceable for a while!

Find someone who can step into your big shoes and clearly list their duties. Try it once and maybe this could become a habit each year?