Marketing your business for sale

Once you've prepared your business for sale and determined its value it's time to find a buyer, but that's easier said than done!

You need to decide whether to sell your business yourself or to engage a business broker to do it for you. Selling your own business can be difficult as it requires specialist skills and resources in valuation, advertising, negotiation and sales, added to the ongoing demands of running your business.

Whatever you decide, the successful sale of your business will include the following process.

Spread the word

Look close to home for potential buyers: Explore your immediate networks. This could include competitors, customers, employees, friends, family and industry professionals. You never know who might be interested in buying your business.

Your accountant may also have clients who are in the market to purchase a business.

Advertise: At this early stage, maintain confidentiality of the sale. Use general terms to advertise your business and place advertisements that don't divulge your business name. There are many advertising channels to choose from which include:

• local, state, or national newspapers which usually have a separate classified section devoted to "businesses for sale";
• trade journals, specialist publications, or newsletters that relate to your specific industry; and
• the Internet – there are many websites dedicated to business sales. Search for “businesses for sale” in any search engine to find the popular Australian sites.

Qualifying buyers

Chances are you'll get responses to your advertisement from people who are not genuine buyers including competitors, suppliers, employees or customers trying to find out who is selling; along with sellers of related services, sharks who are looking for weak businesses to buy at a low price and those with little or no money or business management experience.

Obtain a signed Confidentiality Agreement before supplying private financial records to any potential buyer.

Negotiation

Once the buyer is satisfied after physically examining your business and analysing the financial statements, they may want to negotiate certain issues before making a formal offer. Think about the following before you start negotiating:

• negotiation terms: what do you want?
• anticipate compromise: what will you compromise on?
• your walk away position: when will you stop neogiating and walk away?

Finalising the sale

Involve a professional business broker, settlement agent, or lawyer to minimise the occurrence of any problems and to ensure the sale is valid.

Engage a lawyer to draft a contract for the sale of a business as a going concern. Inform the lawyer of all the details and issues you and the buyer have negotiated and agreed upon to be included in the contract.

What's next…

• Do you need to hire a lawyer ?
• Need more tips on promoting your business ?
• Have you developed an exit strategy ?