There are many different reasons for selling a business; perhaps you feel that it's time to retire, but there's no suitable heir to your throne, or maybe you've just had enough and want to devote your energies to something new.
Whatever the reason, if you aren't fortunate enough to receive an unsolicited offer to make a sale worthwhile, you need to find someone to sell to. Should this outlined scenario fit you and the circumstances of your business, the following strategies may be useful in finding a suitable purchaser.
Obtain a formal valuation
While there are various formulas that can be used to make a valuation of your business, it's unlikely that potential buyers will accept what you say about the company's worth. However, a valuation made by a reputable company that specialises in the area will be a different matter, and elicit a more positive response.
If you aren't aware of any such companies, contact the Australian Institute of Business Brokers (AIBB), or the Australian Valuers Institute (AVI), or the Business Valuation Special Interest Group (BVSIG), which was established by the Institute of Chartered Accountants in Australia in 2005. Whichever organisation you choose, they'll be able to help you find an expert valuer that suits your business.
The valuer will need access to all kinds of data, such as financial reports and business assets, in order to be able to arrive at a fair valuation of your company, which you can then use to either support or revise your asking price. Of course, if you aren't happy with the valuation, you can always ask a second valuer to take a look.
Word of mouth
As soon as you've decided to sell, start telling people. Somewhere amongst your friends, business contacts and other acquaintances, someone may be interested, or know of someone who's interested. It may even be that a rival firm wants to buy you out, or that a current employee wants to take over the reins. If someone does come forward, meet with them a few times to gauge the seriousness of their intentions before formally making a sale offer.
Advertise in relevant places
The chances of finding a buyer through word of mouth are very slim, although not impossible. You need to reach a much wider audience, and to that end, it's necessary to place advertisements in magazines, trade journals, newspapers and websites that are targeted towards small business owners who are interested in your segment of the market.
For example, if you own a bar or a small club, there will be lots of trade journals, magazines etc. that are only too happy to accept advertisements from people who are selling up their businesses.
Find a business broker
If you draw a blank with both word of mouth and advertising, perhaps it's time to look for professional help in the form of a business broker. Business brokers are intermediaries between those who want to buy a business and those who want to sell. They can also help to determine the value of your company if you haven't already had a formal valuation done.
However, their main benefit is in the marketing of your company and the handling all the initial enquiries from potential buyers, whittling them down to a realistic short-list, thereby saving you valuable time. Selling through a business broker is also a good way to ensure confidentiality, as you may not want competitors, for example, knowing what you're doing.
The one potential drawback is that the service doesn't come cheap, as the fee is usually based on a fixed percentage of the eventual sale price of your business. Nevertheless, depending on your circumstances and the luck you've had through word of mouth and advertising, it may be the correct option for you. If you want to find a broker, the Australian Institute of Business Brokers (AIBB) will be able to help you find what you're looking for.
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