ATTENTION SELLERS! – IS YOUR BUSINESS REALLY READY FOR SALE? (1)

1
ATTENTION SELLERS! IS YOUR BUSINESS REALLY
READY FOR SALE?BYhttp//benchmarkbusiness.com.a
u/
2
As a business broker I have the privilege of
assessing hundreds of different businesses from a
variety of different industries. One of the most
common things that I come across is a situation
where the business is often NOT ready for sale.
Sure, the business owner is doing well, and in
their mind they are thinking why shouldnt my
business sell? There are several reasons why a
business needs to be prepared for sale. Lets
look at what the most common issues are that halt
or stall a sale
3
1. The lease if a lease has minimal tenure left,
or there is no option period on the lease it can
be a problem. In the mind of most Sellers this
seems perfectly ok, and in some instances I have
witnessed well-established businesses operating
on a month to month basis where the relationship
between Seller and Landlord seems to be ok.
Thats all very well for the Seller, but in the
mind of the Buyer this can throw up a host of
issues. Such as, the Buyers financiers not
lending money on a short term lease with minimal
tenure, or on a month to month basis as there is
no security. Buyers wonder will the landlord
extend the lease?, will the landlord throw me
out?, at whos cost?, will there be any changes
and increases to the lease agreement if it is
extended, what will the terms be?, will the
landlord require a bank guarantee? And on it
goes.These unknowns must be eliminated to give
the buyer confidence.
4
2.The Stock in many cases I come across
businesses that do not complete an official stock
take, so the stock value is a guesstimate. As
the Seller has been trading over the years the
stock has slowly increased and so when the time
comes to assess the stock for a business sale, we
find that the business is either over stocked,
theres old stock, out of date stock, devalued
stock etc. The stock value is a big consideration
to a Buyer as this can affect their working
capital needs, and in some states of Australia
there is a Government Stamp Duty to be paid on
stock when purchasing a business.
5
3.The Financialsmore than ever since the GFC
days Buyers, their Accountants and Financiers are
requesting or insisting upon viewing the full
up-todate completed financials. I have come
across Sellers who are reluctant to have their
current end-of-year financials completed as they
are not required to complete them until the
following year, and this will save them spending
money now. Again, this is going to slow down the
sale. A great way to resolve issues quickly that
could potentially stall a sale is to engage a
professional Business Broker to conduct what we
call A Health Check on the business. At
Benchmark we have a great tool available to
Sellers called 12 Tips to Selling your
Business. This document has been developed by
professional Business Brokers to assist Sellers
to work as a team with their appointed Business
Broker, to present the business for sale at its
optimum level of performance, and presentation.
6
BROKERS TIP Prior to a Seller engaging the
services of a Business Broker (and the Brokerage
Company) check these points out first. Meet with
your Broker (face to face), and if possible go to
their place of business (Head Office), why? Ask
yourself, do you feel comfortable with the
company? Do you feel you can work with your
Broker youve engaged to do the job? We
encourage Sellers to interview us first, as the
Business Broker and Seller must get on together
to achieve the best possible outcome. and to
properly prepare for a sale.
7
Contact Info AddressBroker Support Centre,
Suite 104, Bermuda Point, 20 Lake Orr Drive.
Varsity Lakes, QLD 4227 Australia Phone
number1300 366 521 (toll-free)61 7 5562 2711
(international)07 5562 2744 (fax) E-mailadmin_at_b
enchmarkbusiness.com.au