Selling your business can be a stressful and time-consuming process, but knowing how it works can be half the battle. Once you tell yourself “I’m ready to sell my business”, there are several steps to get through.
When you’re ready to sell, it’s important to know what you’re selling. You may or may not be looking to sell your business in its entirety. When selling a business, you have to decide which assets to sell or keep. This may include, but is not limited to, equipment, products, property owned by the business, the business name, or any intellectual property.
Whether you’re selling a small business or a large one, you may need help from a professional business broker or a valuer. By using a broker, you can be sure you’ll get the best possible price. “Why not just sell my business online by myself?” you may ask. Brokers have databases of buyers, so they can give you access to buyers you may not be able to reach. Moreover, brokers can help you sell your business at a higher price with negotiations. You will also probably still be running your business, so a broker can manage buyers while you’re busy. Plus, brokers should get much better value for money on a wide advertising campaign for your business. Brokers are very helpful throughout the business selling process.
Once you’ve decided whether or not to use a broker, you’ll have to set a price to sell your business. You might have a price in mind, but your business’s selling price could be lower. In general, you don’t want to set your price too high or low. High prices will scare away buyers. Meanwhile, selling your business at too low a price and will lose you money.
There are three main price variables when selling a business: the value of your goodwill (income, brand name etc), the value of any equipment and facilities, and the value of setting up your business.
This leads us onto the three methods to determine a price when selling your business: return on investment analysis, setup costs, and opportunity cost.
You determine the return on investment by calculating your business’s adjusted net profit. Setup costing means setting the price based on the cost of opening the business in the first place, but usually at a discount if your business isn’t profitable. Finally, the opportunity cost is setting your asking price based on what you think the business will earn in the next 12 months. This method is probably the least accepted by buyers in the market unless the income is assured with contracts with your customers.
Ensuring you have the answers to future questions from your buyers and the information they’ll need to make a decision on your business is important to achieving a successful sale. But giving the right pieces of information to the right buyers (qualified ones) at the right time (not too much too early in the process) plays a key role in navigating an initial enquirer to a purchaser for your business. As part of the Bonza service, we prepare your business information into a clear and professional document to be provided to buyers once they’ve signed confidentiality. Using our industry experience, we ensure the right buyers get the right information at the right time for a smoother sale.
You can market the sale of your business on a variety of networks yourself, but using a broker is the simplest way to find buyers. You can advertise the sale of your business online or traditional media. You can also use your own personal and professional networks or word-of-mouth. However, a broker is easiest because they have databases and subscriptions to advertising platforms. Plus, at Bonza, we develop your advertising, manage your campaign throughout the sale process and follow up on potential buyers for you.
Once you’ve found a buyer, you have to draw up a contract. Generally, lawyers will draft and review business sales documents to ensure everything is legitimate. The business’s sales contract should include all information relevant to the sale: such as transferring assets, liabilities and leases, transfer of employees, and agreements about what happens if there are any issues.
After the contract is signed and all obligations are met, congratulations you’ve completed your business’s sale and will now receive payment.
Now that you understand how to sell a business, Bonza BFS can help you. At Bonza BFS, we’ll sell your business for a fixed fee instead of a commission. We’ll help you set your price, create your business’s profile, market your business everywhere it needs to be, and handle all of your enquiries until sold. We’re committed to selling your business because we know the most crucial part of a sale comes after your buyer has been found. For more information, go to https://bonzabfs.com.au or call 1300 266 922.