When is The Best Time to Sell a Business?
Selling a business is much like selling a house– the best time to sell is over Spring and Summer. When the weather is warmer, buyers are in a more positive mind set and businesses are generally more profitable with stronger cash flow. Of course you can also sell a business at any time over the year by keeping the following points in mind:
Buyers and their accountants love to review “the numbers”. So it’s best to have your most recent financial year Profit & Loss Statements, Interim Management Accounts, BAS, Top 10 Key Supplier lists, Top 10 key Customers Lists, Staff entitlements all up-to-date and ready for review.
Have a Spring Clean
If you put your house on the market, you will most likely clean it up before potential buyers come for an inspection. The same rule applies when selling a business. There is nothing worse than showing a buyer through a business when the venue is messy. It puts the buyer off straight away. Once you make the decision to sell your business, take the time to give it a spring clean. Throw out the junk and remove any personal items that aren’t included in the sale. The business should look its best to entice buyers to become emotionally attached to the space.
Have Your A Team Ready
Business sales are subject to many different factors such as liquor license transfers, health inspections, transfers of property and asset leases, PPSR checks, Mortgagee consent, and the list goes on. So it’s important to have your A team on hand. Your A team generally involves your Lawyer, Accountant and Business Broker– all working together to achieve your settlement goals. Unlike property settlements which are straightforward, business settlements are often significantly delayed, and sometimes fall through completely because of delays with transfers and consents. Hence, it’s always good to ensure your A team members understand your settlement goals and are regularly checking up with all parties for the deal to go through. One key factor to remember is to make sure your Lawyer is experienced with the sale of businesses as the sale of a business is a very specialised area of Law. Your Lawyer could cost you greatly in holding costs or break the deal if he or she lacks experience in this field.
To put it simply, the best time to sell a business is any time when your figures are in order, your business is presentable and you have your A Team ready to go. It’s even better if all your ducks are in line and its Spring time. Give jbb a call to discuss your selling options further. www.justbusinessbrokers.com or mobile: 0409 965 540.