Should You Sell Your Business and Property Together?

NEWS

Should You Sell Your Business and Property Together?

Top Takeaways:

-A lot of small business owners have a self-managed super fund that owns their property
-A lot of buyers are looking to purchase both a property and a business
-The key is to have a two-pronged selling strategy

Hardly a day goes by that we don’t get a call from a business owner who is looking to retire and sell their business, but they also own the property that the business operates out of. When I ask whether they plan on selling or keeping the property, often they say their original plan was to keep the property and rent it out for additional income, but they would be open to selling the property if it helps them sell the business as well.

To me, that’s the smart approach.

I say this because a lot of the buyers that contact us are in the same boat, except on the other side. They’ve got money in their self-managed super fund and they are looking to buy a property, as well as a business that can help pay for the property. They essentially want to do the same thing that the seller has done – just years later.

But reaching these buyers can be a challenge due to budget constraints. For example, a prospective business buyer might have a budget of $1 million. If the property is also worth $1 million, the challenge is if you advertise now, you are advertising a $2 million product. This means your $1 million buyers won’t see it because business-for-sale websites often have price parameters on the search results they provide.

We believe the best strategy is to hedge your bets and run two campaigns. One campaign should be focused on selling the business – for example, at $1 million – while also mentioning that there could be a property for sale if the buyer is interested. The second campaign should be focused on selling both the business and the property – for example, at the collective $2 million price point.

There could even be an argument to run a third campaign focused on selling the property on its own. But we normally wouldn’t do that because the key driver is for you, as the owner, to sell the business so you can get out and cash in. After all, your property is a passive investment, whereas your business is an active one.

As a business broker, we love these calls because it gives us a chance to be strategic and get the best outcome for our clients. Our clients love it too because they can see that we’re more than just a ‘broker’; we’re a valuable partner. We’re getting them the best possible outcome financially so that they can live a more comfortable retirement.

 

For more details contact Finn Business Sales info@thefinngroup.com.au