Business sellers urged to '˜shop around' for best deal
Whether it's worth Â£5000 or Â£50 million, marketing a going concern needs careful planning to maximise the return on your investment.
Selling your business could have a huge financial impact if it’s not done right, says a leading property agent.
According to Lancashire County Council there were more than 50,000 businesses registered across the county in March 2016 – around a 13% rise since the start of the decade.
While new businesses are obviously being created, existing ones also change hands every year. But without expert guidance, sellers could undervalue their property, face a lengthy wait for a buyer or unnecessarily breach business confidentiality.
According to Jonathan Holmes from Ernest Wilson, the premier business agent, the basics of attracting a buyer aren’t that different from selling your home.
“List the business for sale with a business transfer agent who has a strong presence in various media sources, to give the best chance of finding a purchaser,” he says.
“When the valuer attends to take photographs, ensure the premises are in the best condition and repeat this process each time you have a viewing – first impressions count.”
However, so called ‘mystery shoppers’ could be assessing your firm at any time: “Potential buyers usually like to do ‘secret shops’ before arranging a formal viewing,” says Jonathan.
Following a formal viewing the buyer will normally ask for a copy of the accounts and lease before deciding if they want to make an offer.
“The offer would usually be placed by the purchaser to the agent who in turn would communicate the offer to the seller and negotiate to the best price,” says Jonathan.
“A good agent will always offer advice to the seller regarding any offer.”
Once an offer has been accepted, the buyer will have to provide proof of funding, a deposit and references if they are required for a landlord.
On average, once an offer has been accepted the sale process can take between six and eight weeks depending on the situation.
Jonathan’s five top tips to make your business stand out
· Arrange for a valuer to have a look around and provide a face to face valuation and discussion.
· Be very wary of any agent who asks for money up front. Are they fully committed to selling your business? Do they have the resources to do the job properly if they need you to pay in advance?
· Provide as much information about you and your business as possible, particularly when it comes to documentation such as copy accounts and leases. First time buyers are sometimes a little nervous and any information you can give them always helps to move things forward.
· If possible, provide an inventory of any fixtures and fittings
· Consider your confidentially. Do you want a ‘for sale’ sign appearing outside your business? If not, does the agent have other ways to market your business?
Jonathan says the reasons people sell their businesses vary, but many are looking for a new venture, meaning they could be selling one business and buying another at the same time.
“Many of our clients choose to sell their existing business for a new challenge and an offer can be made on a business subject to the sale of another if need be.”
“An accurate valuation is crucial if you wish to achieve a sale of your business and our valuers have experience ranging between 21 and 44 years of the business transfer market,” says Jonathan.
“We are the leading business transfer agent in the North of England. In order to value a business you must be constantly selling them, as indeed we do, to be able to access the comparable evidence required to provide an accurate valuation.
“We do not provide this comparable evidence to any other agent so only by using us are you able to access this vast wealth of experience.”
Ernest Wilson has the resources to market your business using a range of options including its website, newspaper advertisements, online business property portals, a new TV advert and a strong social media presence.
“We also have thousands of clients registered with us who are actively looking to buy a business,” says Jonathan.
For more information and advice on selling your business, visit https://www.ernest-wilson.co.uk/Selling-A-Business/