Selling A Business: 5 things you need to know
Selling a business can be underestimated by business owners if they’ve never sold a business before. It requires professional advice and guidance, which is why at Bsale we like to speak with professionals in the field to share their thoughts on business transactions.
Below, Lindsay Power from Adelaide Business Agents walks us through five key points all sellers should be aware of as they make their way through the sale of their business.
WHY USE A BUSINESS BROKER?
Selling a business can be a very long, complex and emotionally draining ordeal, which can add unnecessary stress to your already busy life.
An experienced business broker will (should) know what buyers are looking for.
By engaging a Business Broker, you will also avert potential legal problems which may arise from disputes with buyers due to unfamiliarity in handling the various agreements, documents and processes involved. A broker will embrace your best interests when selling your businesses and try to achieve the best possible results, leaving you with peace of mind to focus on running your day-to-day business activities.
They (should) handle the whole process of selling your businesses from start to end.
Help to properly assess the value of your businesses.
Save your precious time, energy and resources by providing a comprehensive and strategic marketing process to reach out to existing and potential buyers.
Handle inquiries, screen buyers, and exercise due diligence to protect confidential information.
Coordinate the relevant services of trustworthy professional advisors such as lawyers, accountants and bankers as and when the needs arise.
Negotiate the best terms and conditions for you.
Act discreetly so the sale process will not affect the morale or attitude of your customers, employees, competitors, lenders, suppliers, investors, or other business associates.
In summary, the broker can guide you through the whole selling procedure and ensure compliance on legal requirements to complete a successful sale. They should work for you and guard your best interest; yet, always remember that you have the final say and you are in control.
Therefore, it is important to engage an experienced Business Broker who understands that they have fiduciary duties to you.
THE SEARCH FOR BUYERS
During the marketing stage, the seller’s responsibility is to continue to run the business as if he is going to keep it. Their job is to safeguard all confidential information provided by the seller, actively market the business, find and qualify all potential buyers and negotiate the terms of the sale. They should have a fiduciary responsibility to the sellers to only show businesses to those buyers that will abide by the confidentiality guidelines.
NON-DISCLOSURE AGREEMENT
Potential buyers are required to review and sign a non-disclosure agreement, which outlines his/her responsibility in safeguarding the seller’s private data. This occurs before any detailed information concerning a specific opportunity/confidential information is released. We are committed to protect the confidentiality of the business sale. This is the preliminary step to protecting the seller’s confidential information.
PROFESSIONAL CONDUCT
An experienced broker understands that public knowledge of a potential sale can affect the morale, behaviour, attitude, and actions of employees, customers, competitors, lenders, suppliers, or investors, and thus the value of the company.
They should safeguard and release appropriate information only to involved parties.
HOW LONG DOES IT TAKE TO SELL A BUSINESS?
It usually takes longer to sell a business than a house or a commercial building. Because of the confidential nature of a business sale, a business broker cannot put a “For Sale” sign on the window.
The average time to sell a business is usually between six to twelve months. However, there are exceptions. Some businesses may sell within a month of being put in the market. Others may take several years to attract the right buyers. An experienced broker should seek out and talk to buyers daily. Most brokers will have (should!) have a Buyer database to assist them in your goals-needs. The “next one” may be just the “right buyer” for your preferred type/style of business.
Author: Lindsay Power
PowerABA Business Brokers
