Selling Your Business?
Once you have decided to sell your business, plan it well.
If one of your
objectives is to get the best price, you need to consider who the likely
buyer may be, then have strategies to target this group. By managing the
marketing process you can maximise your exposure while maintaining
confidentiality. If you want to sell, and want a good price, then you'll
need to tell buyers you have a business for sale! One or two mismanaged ads
will only expose your business to a small percent of the buyer pool - and
could well alert your employees, customers and suppliers that the business
is up for sale. Key employees might jump ship, others might stop putting in
the effort, your customers might search for other sources and suppliers
might search for other customers. It is important to manage this process and
the disclosure of information. Selling your business will be one of the most
important things you'll do - you get a single chance to get it right.
If you make an effort to understand the steps in selling, of who your likely
buyer may be, then careful planning - with the help of a professional
advisor, will get you well on the way towards negotiating a price and terms
that are suitable to you.
Key points to consider when selling your business. Buyers will be looking
for cashflow, and to quantify the value in your business.
Choose experts (experienced professionals) to help you through the
process, avoid any pitfalls - legal/ethical or financial.
Valuing your businesses - determine a realistic price considering your
buyer, the market, and the condition of your business. This is generally a
job for the experts.
Finding a buyer - Create a marketing plan and an Information Memorandum
(you may enlist a broker to help - www.bizbroker.co.nz ), to target your
potential buyers. Don't just tell the guy next door! You need to manage the
process, tell people, and promote your opportunity widely through print, the
internet and direct mail - after all, you want the best prospects for a
successful sale.
Structuring the deal - Identify options as to terms - be it what is being
sold, vendor finance, training etc., paying attention to any the tax
implications. Your accountant and lawyer can help here.
Businesses can take some time to sell - influencing factors include price,
type, ease of finance and market conditions.
Preparing an Information Memorandum.
An important tool that assists in promoting your business for sale is a
sales information memorandum. This is essentially a business plan in
reverse. It should present all the important information about your company,
products, industry, and market in an easy-to-grasp format that presents your
company in a positive light.
Start with an executive summary that briefly lays out your key selling
points. The buyer will always want to know why you are selling, so have an
explanation ready. Include sections that outline the facts about your
company's history, structure and operations, market, products, historical
and projected financial statements, the asking price and basic terms you are
looking for, list your employees and any physical assets, together with any
other information that explains who you are and why your business is such a
strong opportunity. Keep in mind who your audience is and don't divulge any
information that you wouldn't want your competitors to see.
In particular, if problems exist, don't try to cover them up. The buyer will
find out eventually and will probably distrust everything you say after
that. Instead, briefly state the problem and then present one or more
possible solutions.
For more information on selling your business visit www.nzbizbuysell.co.nz
or phone Richard on 03 337 0005.
To request an advertising information pack, please click
HERE.
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