Tony Foster MNAEA, MICBA Associate Director at Webbers Commercial has been selling businesses in the area for over 35 years and he shares some useful tips on the best way to plan for your business sale.
In his many years of handling business sales of all kinds from a Family Adventure Theme Park in Somerset to a Tea Room on Exmoor and everything in between. Here are some useful tips on preparing for your business sale:-
1. Kerb Appeal As with houses the first impression is always the best, If it is a general store you are selling make sure the shelves are well stocked and the shop window well illuminated and clean. Likewise if it is a Hotel or Guest House why not redecorate the outside and tidy the garden and Car Park before buyers arrive.
2. The very important matter of trading accounts When your valuer arrives present him with an up to date copy of the last three years adjusted profit an loss sheets, take out any individual expenses or excessive wages so the figures are presented in the best light. Have projected figures available as well as monthly activity so buyers are well informed. These matters are now crucial for arranging finance.
3. Legislation Ensure your business is up to date complying with all government legislation such as licences, food hygiene and fire regulations.
4. Preparing for the sale Your Agent will recommend matters such as Asbestos Audits, Energy Performance Certificate. Work with your Agent in preparing the sales particulars, define a marketing budget and advertising plan, carefully consider how you wish to market the property. For example are you prepared for your customers and staff to find out about the sale or do you want a discreet sale.
5. How to sell Decide with your agent a method of sale, private treaty, tender or auction. Your agent will give best advice to achieve the best price.
6. Do you want a board The Agents For Sale board sells 7 days a week, 365 days a year and is a clear signal on the location of the property for passing footfall and traffic, as well as an identification for viewers. This often works even for going concern sales.
7. Stock At Valuation Have an accurate estimate of the extra Stock At Valuation the buyer needs to pay.
8. Inventory Are any items of fixtures, fittings and equipment on rental or lease purchase agreements. Prepare a full inventory of trade fixtures, fittings and equipment which will be attached to the sales contract.
9 Advise your Solicitor Best to be well prepared in advance. Ask your solicitor to open a file as soon as you place the business on the market so that they are ready to produce a sales contract and answer any pre-contract enquiries.
10. Speak to your accountant It is always best to seek you accountant's advice regarding matters such as Capital Gains Tax as soon as possible.
11. Be ready at the viewing Be prepared to answer questions about opening hours, staff levels, Gross and Net Profit, the seasonality of the business, promotion and advertising. If you are in the hospitality business you may well be asked about occupancy rates, advance bookings, future advertising and the like. Present the property well, keep all lights on, heating up and a warm fire in the hearth.
12. Your Business Web site This is often viewed well before the buyer visits the property. Ensure your on-line presence is up to date and fresh.
13. Be Informed Keep in touch with your selling agent. They will provide you with invaluable feedback on viewings and once a sale is agreed will carefully monitor the transaction keeping all parties in touch.
14. Best time to sell We are often asked this question and the truth is that businesses sell throughout the year. However with tourist related businesses most buyers are seeking to take over early or late in the year. Added to this property always looks best in Spring and early Summer.
15. Leasehold sales Have all lease documents available. If deemed appropriate advise your Landlord. Ensure all rents are up to date. Be prepared to pay for the assignment costs.
16. Keep accurate records Matters such as licensing, fire regulations, building regulations, any relevant planning permissions, all these facts should be at your fingertips ready to be passed on to your buyer.
Webbers Commercial have been established for over 40 years and have sold hundreds of businesses in the region. They specialise in all aspects of Commercial Property and business sales. Call Tony on 01271347888