There are questions to ask if you are selling you business privately. Will the advertising and promotions reach as many potential buyers for the business? Where will it be advertised? Will I pay commission to sell the business? Does it include anything else?
Asking questions is definitely the right thing to do, as you need to fully understand the process. Many people these days wouldn't even consider using a real estate agent or business broker. Why? Because they are loathe to hand over so much in commission!
Think about it. You've worked hard to establish and grow your organisation. It's probably taken blood, sweat and tears! Shouldn't you keep as much of that money as possible?
Australia has largely been built on small businesses. As of June 2016, there were 599,000 small businesses in the country. That's an increase on the previous year. What's more, for the same time period, there were 1.2 million sole traders - excluding self-managed superannuation funds.
So it's no surprise that when it's time to sell, an increasing percentage of business owners are choosing to go private. The advantages and financial rewards can be huge.
The main reason vendors choose to work with a business broker is time. They are extremely busy and don't want to be bothered by a barrage of phone calls and questions. That's fair enough, but how much input will you still need to have?
Firstly, the business broker will need to meet with you to arrange the paperwork, and gather some information. As he or she starts to write up the marketing plan, there will be more questions to answer.
As potential buyers start emerging, there will be more calls and questions. Quite possibly, you will be asked to talk to these people directly, or even show them around your business. You will also be responsible for organising the financials, legals, and any other necessary paperwork.
You will need to be working on your exit plan, informing staff and customers, organising any new licensing, and more. So what are you actually paying the broker for?
Business brokers make their money by taking a percentage of your sale figure. At 10%, that's a substantial chunk of the sale price. As yourself if you can afford to give that away.
Business Queensland points out that we might feel pressured by the broker to accept a lower offer, just to ensure a quick sale and commission.
So what happens if you decide to sell your business privately? One thing is for sure, you will have far more control over the process. And if you're the one doing all the legwork, it seems fair that you should keep the commission!
When we talk about selling a business privately, we don't mean putting an advertisement on Gumtree. We are talking about specialist organisations that will help you through the process to achieve the best price.
Take an organisation such as Coast to Coast Businesses for Sale. Australian-owned and operated, this is a company that provides all the help and facilities you need to successfully market and sell your business.
Your business will be marketed online in various websites, as well as in print. You will benefit from professionally written content. Photographs will be uploaded and videos made. And you can also enjoy the benefits of the company's Buyer Match Service.
That sounds a lot like using a business broker, right? So what's the difference? Dollars - lots of them! Organisations like Coast to Coast Businesses for Sale do not charge commission - ever. So that 10% of the business sale stays in your pocket.
Sure, there are costs involved, but these are nothing compared to commission. Plus you get total control over your business and your sale. You will never be pressured into accepting a contract you don't like. Whether you dislike the offer, or the person making it, it's your decision!
There are a few steps you can take to make this process even smoother.
Before you do anything, have a really good think about your reasons for selling. Sleep on it, revisit it, discuss it with your family, friends and colleagues. You need to be 100% sure it's what you want at this time.
The main reasons people sell businesses are because they are retiring, are in poor health, or need to free up capital for a new project. Those are very valid reasons.
However, if you are selling because you just need a break, or you're having staffing issues, there could be other solutions.
This can take months or even years. All your systems and documentation need to be up-to-date and relevant for starters. You need to review all existing contracts, and get your financials updated. Decide what's staying, and what's going, and ensure all maintenance and cleaning is up-to-date. You need to show you business in the best light possible.
If you're not using a business broker, you can still get help with this from your solicitor or financial advisor. You can also research the market online, and see what other similar businesses are selling for.
The most common method for valuing a business is by using your ROI - or Return On Investment. As a rule, the formula is: Sale Price = (net annual profit x 100) divided by ROI percentage. Your accountant can advise on your ROI.
With all that in place, your business is ready to hit the market. You can start to feel confident about a sale, knowing that you will never pay commission.
Sell your commercial property or business privately without business brokers. We advertise your business for sale or real estate listing in our go-to website, national glossy Coast to Coast Magazine and major real estate websites reaching many motivated buyers. Call now to sell your business or property 1300 793 792 or email firstname.lastname@example.org.