Selling your business fast
It’s the best scenario for most business owners when they decide that they want to get out. The problem is this-how do you find a buyer who will pay you the money you want and also get a deal done quickly?
Here are some reasons why you might want to sell fast.
– The business Is losing money every month.
– You aren’t making enough money to cover your own costs.
– You’re just over it.
– You’re going through a separation with a family member.
– You’re not getting along with your business partner.
– It’s just too stressful.
So when it comes to selling fast-how fast is fast?
Well in Australia the average time it takes to get a business sold can be between six and twelve months.
So the reality is if you get your business gets sold within 3 to 6 months that’s pretty fast, and if you get it sold in under three months – that’s very fast!
How should you price the business?
Work out the lowest price that you think someone will pay for the business and that you would be willing to accept the worst case scenario. Then add about 20 to 30% on top of that for negotiating. You can get a good opinion from a qualified business broker who deals with buyers every day so they will let you know what someone will pay.
What marketing should you do to find a buyer?
There are three main ways to find a buyer.
– Firstly it might be someone that you already know.
– Secondly, you advertise the business publicly on the various business for sale websites.
– Thirdly you engage a business broker who already has a strong database of people that are looking to buy a business.
Ideally, you’ll do all three at once that is the way to get the faster sale. You’ll need to budget to invest some money into the marketing but hopefully, that’s just temporary and you can then get that back in one lump sum once the business is sold. The most economical way is via a business broker where you can sometimes pay a low weekly amount. This can help because you can pay for it from the weekly cash flow from your business.
What are the costs should you allow for?
There will be things like a sale contract between yourself and the buyer. This is important because it will protect your legal obligations not only during the transaction but afterwards as well. You need to make sure that you have no more liability and risk once the new owner takes over.
You’ll also need to have the lease signed for the premises across to the new owner. You’ll also need to make sure that all the debts of the business are paid from your side at the time of settlement. These three things mean that you’re probably best to have a lawyer handle these for you. Often they can do these tasks relatively simply and can charge you a fixed fee of between two and four thousand dollars.
– Allow yourself at least three months.
– Market the business for sale. It’s a product that is now worth tens or hundreds of thousands of dollars to be able to be sold it needs marketing and it needs a professional salesperson to sell it.
– Cover yourself legally so you can move on to your next venture without any risk.
Written by Steve Finn, Co-Founder
Finn Business Sales