Selling Your Business

Selling your business is a very complicated and detailed process requiring specialist skills and experience. Don’t leave it to part-timers who do not specialise in business sales – they will not be up to date with current market pricing or current marketing methodologies. As a result they will take too long to sell your business and they will not achieve the best price.

You have so much to gain with a successful sale, and so much to lose if it is not managed correctly.

That’s why your decision to appoint a professional broker is so important.

We manage everything for you, starting with a formal appraisal of your business and then, when listed with us, we will prepare a comprehensive Information Memorandum which clearly outlines the strengths of your business. We will then target prospective buyers on our database and then, to create competition, we will advertise in relevant media as required to attract even more buyers. We aim to create competition for your business so as to obtain the highest possible price.

We don’t take any shortcuts and we ensure that when an offer is received, it is correctly managed through to settlement. Far too many business sales fall over because the broker is too lazy or inexperienced in this critical stage.

Detailed Business Reports
Our factual professionally presented business reports . information memorandums cover 95% plus of any questions a buyer may have. This speeds up the selling time and enables us to get the best price for you. Yes, preparing the report takes time, and does involve a commitment fee from you (which is fully refunded when we sell your business).

We are 100% focused on selling each and every business and have an unmatched record of obtaining the best price in the shortest time.

Confidentiality
The confidentiality of your business is as  important to us as it is for you, which is why we ensure every potential buyer signs a legally binding confidentiality agreement before giving any identifying details. We will always contact you if we believe the potential buyer is a customer, competitor or employee – further ensuring that your confidentiality is maintained.

Selling businesses is our specialty and we will always provide you with professional services and if the current market value does not meet with your goals, then we can work with you to improve your profits and hence your business value. We’re not just “after your business listing today” – because we are 100% focused on getting the result you want and need.

An Easy and Profitable Deal
Why try to sell your business yourself, trying to deal with preparing sales oriented business reports, guesstimating the business value, conducting negotiations to obtain the best deal, trying (and failing) to maintain confidentiality so that competitors, customers and employees don’t find out it is for sale, whilst all the time still trying to manage your business?

Contact Martin Dabb on 0458 290 100 or Robin Blay on 0419 906 406 for a confidential review of your requirements.

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Services For Sellers

The sale of any business is a.far more complex than many people expect, with many small and large tasks to be completed correctly to ensure a successful sale. We have highlghted below the services that ABPS International carries out to ensure a successful sale for our clients.

“THE SALE OF YOUR BUSINESS WILL INCLUDE THE FOLLOWING SERVICES”

BUSINESS MARKET APPRAISAL

1. Analysing the accounts of the business
2. Identify adjustments to profit and determine adjusted net profit
3. Discuss / review with owners any key operational issues
4. Obtaining copies of leases (property, plant and rental)
5. Determining plant value
6. Market Research, prepare appraisal and present to business owners

LISTING THE BUSINESS

1. Prepare exclusive authority
2. Listing form registration into ABPS system
3. Agreeing viewing arrangements
4. Send report questionnaire to owner
5. Preparation initial internet advertisements
6. Complete detailed business report or information memorandum and ensure approval by owners

MARKETING YOUR BUSINESS

1. Prepare & place internet advertisements
2. Regularly modify internet advertisements
3. Conduct buyer search on ABPS database
4. Contact accountants, finance brokers and lawyers as appropriate
5. Include in regular email newsletter
6. Prepare newspaper advertising copy (as and when required)
7. Approval by owner of newspaper advertisements
8. Placement of newspaper advertising
9. Maintain details of all prospects and enquiries
10. Marketing to established business competitors, suppliers or key clients subject to Owner approval
11. Determine prospects for Management Buyout (full or partial involvement)
12. Weekly review with owners and discuss ongoing marketing strategy

MANAGE LISTING ENQUIRIES

1. Obtain appointment to Buyer at ABPS offices (unless interstate or overseas)
2. Identify and qualify the Buyer
3. Determine Buyer’s real requirements
4. Obtain signed Confidentiality Document from buyer ( in person unless interstate or overseas)
5. Present  business report, emphasise key aspects
6. Prospective buyer takes report ONLY IF they are definitely keen
7. Follow-up all buyers, ensure all reports are returned by due date

VIEWING THE BUSINESS

1. Ensure buyers are willing to present an offer after viewing the business
2. Establish appointment for day & time to suit both sellers and buyers
3. Introducing buyers to business owners
4. Guide the meeting, ensuring all key selling points are highlighted
5. Private review with buyers immediately following meeting, then review with business owners
6. Follow-up buyers again, within 24 hours and review with owners

NEGOTIATING OFFER TO BUY

1. Prepare an offer with Buyer
2. prepare standard forms and special conditions with Buyer
3. Presenting the offer to Owners
4. Explaining all standard & special conditions
5. Review and, if necessary, obtain counter-offer from Owners
6. Final negotiations and gain acceptance of offer by Buyers and Owners
7. Prepare Clearance of Conditions forms
8. Liaise with Settlement Agents, banks and finance brokers
9. Liaise with Buyers & Owners accountants to facilitate due diligence.
10. Obtain updated Plant and equipment schedules and arrange inspection as required
11. Obtaining the deposit.
12. Continue to manage business sale through to settlement
13. Ensure Conditions all cleared by due date, inform settlement agents accordingly
14. Keep all parties fully informed with regular progress reports

INFORMING BUYER OF

1. Stamp duty
2. Settlement Agents
3. Rates and taxes
4. Leases
5. Clearance of Conditions

INFORMING BUYER OF ALTERNATIVE PURCHASING CONSIDERATIONS

1. Vendor finance
2. Option to purchase
3. Share.
4. Property exchange (where applicable)

OFFER ADMINISTRATION

1. Introduction of Buyer to:
   1. Managing Agent and / or Landlord
   2. Franchisor (as appropriate)
   3. Bank Manager/Finance Brokers
2. Ensure all due diligence information obtained and passed onto Buyers.
3. Manage any additional information requests for Finance and Due Diligence
4. Arranging stocktake as required.
5. Maintain regular communications with Owner, Buyer and Settlement Agents

CHECKLIST FOR BUSINESS SETTLEMENTS

1. ABPS to ensure to Agreement to Purchase, Standard & Special Conditions signed by all parties
2. ABPS to ensure that if a company, common seal and two directors or director and secretary to sign
3. ABPS to ensure Buyer left with copy of offer and conditions
4. ABPS to ensure all Owners to sign acceptance and receive copy of offer plus standard conditions
5. ABPS to ensure counter offer and/or alterations to be initialled by all parties
6. ABPS to ensure Owner and Buyer receive photocopy of amended contract once signed and initialled
7. ABPS sends with photocopy of contract to Owners, Buyers settlement agents, complete with covering / instructing letters
8. ABPS to ensure to complete Buyer’s request for New/Assignment of Lease form
9. ABPS to ensure that Buyer completes all necessary information required by managing agent
10. ABPS to ensure that Buyer receives copy of lease documents
11. ABPS to ensure that Owner signs Request for Assignment of Lease form
12. ABPS to ensure that Owner to notify Landlord of sale (agent to draft letter on his behalf)
13. ABPS collects deposit, issues receipt and notify all parties
14. ABPS General Manager Operations checks / reviews documents and monitors progress
15. ABPS monitors clearance of all special conditions and provides assistance as required
16. ABPS obtains written approval of all conditions as they are met
17. ABPS obtains copy of finance approval letter. Send copies to owner and settlement agents
18. ABPS asks Owner to advise Landlord/Managing Agent of intending sale
19. ABPS ensures seller introduces Buyer (with completed forms) to Landlord/Managing Agent
20. ABPS liaises with Owner/Buyer/finance company/Landlord/Managing Agent regarding settlement date
21. ABPS to introduce Buyer to franchisor (where applicable) and obtain written approval
22. ABPS to obtain written extension if settlement delayed
23. ABPS confirms any special stocktake arrangements with all parties
24. ABPS ensures buyer signs lease clearance of conditions
25. Following clearance of all conditions, ABPS to send original offer and acceptance to buyer’s settlement agent for stamping
26. ABPS to send standard thank you letter to Buyer, Seller, Managing Agent, Landlord, Buyer’s Accountant, Seller’s Accountant and Settlement Agents

POST-SALE

1. ABPS follows up with Buyer to ensure handover process is being managed appropriately
2. ABPS keeps in regular contact with new owner to ensure business is running smoothly
3. ABPS provides annual market appraisal of the business value – after all, business ownership is not forever. The ultimate goal for a new owner is to grow the business and then sell it again.

Maybe this is your “lightbulb moment” – the time when you realize just how complex a business sale can be. There’s so much to do and so much that can go wrong if you don't appoint a broker with the required attention to detail. Right up to the day of settlement things can go wrong, which is why you need experienced people assisting you to ensure a successful sale.

Contact Martin Dabb on 0458 290 100 or Robin Blay on 0419 906 406 for a confidential review of your requirements.

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Myths about Selling

There are several myths that business owners must understand:

Myth #1: I can sell my business myself.

Some owners believe they can do a better job selling a business without the use of professional assistance. Others believe they can save money by selling a business themselves. Owners forget to factor in their ability to reach the largest audience, something that business brokers can do. Others forget that they need to have their sales and earnings stable or growing while they are trying to sell and thus something has to give if time is being spent on weeding out tire kickers. Business brokers also have the tools and experience to position the business in the best light and sell business potential. A business broker will recast the business financial statements to calculate seller’s discretionary earnings to show the true economic picture of the business. Since businesses are typically priced at a multiple of ebitda, for every dollar the business broker recovers that is legitimately buried in the financial statements, a business owner will receive a multiple of it in the selling price. Selling a business is not like selling any other product or service. If you’re looking to sell on your own, confidentiality is lost. If word of a potential sale gets out, there are definite risks of losing existing and potential customers, employees, or suppliers with favorable credit terms.

Myth #2: I will sell my business when I am ready.

Certainly, an owner wants to be sure he or she is mentally and emotionally prepared to sell. But personal readiness is just one factor. Economic factors can have a significant impact on the sale of a business. Sale prices can be affected by industry consolidation, financial lending capabilities and interest rates, unemployment and many other economic measures. It is important to align your personal, business and financial goals when you plan to exit your business. Business brokers know what is happening in the market and ways to address the issues that currently exist.

Myth #3: I know what my business is worth.

Some owners will base the company value on what they need for retirement. Others will tell you they want $X because that is what they paid for the assets. And others will tell you that Business Owner XYZ at the golf club sold their business for a 6x multiple. Hmm…6x multiple of…Net Income? Seller’s Discretionary Earnings? EBITDA? EBIT? Most business owners can’t answer this question when asked. And of course others utilize industry multiples, but if they are not applying the multiple to the right base or logically work the numbers, the business will potentially be over or under priced.

A professional market appraisal is a good idea for anyone seriously considering the sale of their business. An outside appraisal will include a thorough analysis of the business and the market it operates in. This will provide a solid understanding of the company’s growth potential, not some vague industry average or opinion of someone at the golf club. Business brokers will position to sell business growth opportunities, however the driving force is the past performance of the business.

Myth #4: Selling a business is like selling a house.

Preparing to sell your house may take a couple weeks. Then you talk to people to get the word out that the house is on the market. Once you get a satisfactory offer, you sign the paperwork, turn over the keys and move on. If real estate agents are involved, you may never even meet the home buyer.

Selling a business is a much more complex process. A successful business sale usually requires a great deal of pre-planning. This may require that you operate your business for an extended period continue sales growth, develop and cross train key employees, document your procedures and control expenses.

The average house will sell in less than four months, while a business sale is three to eighteen months. Even after the business is sold, the seller can be expected to put in at least a several months, and possibly years of transition time, helping to make the new owner a success.

Understanding the realities of a business sale will prepare you for the process as well as help maximize your price and minimize your taxes. For most business owners, a significant amount of their net worth is in their business. Just like most individuals will go to a specialized doctor to address specific health issues to receive the best care, look at your business in the same light. Make sure you hire an experienced Business Broker to handle the sale of your business. The cost of a business broker is easily gained by them selling your business for a higher price, in the shortest possible time – with maximum confidentiality. And you must still be managing and growing your business whilst it is for sale, not trying to do what you’re not experienced at.

 

Contact Martin Dabb on 0458 290 100 or Robin Blay on 0419 906 406 for a confidential review of your requirements.