Whatever reasons you have for deciding to sell your business, one thing is certain: you’re going to need some assistance. Unless you are lucky enough to be passing on your enterprise to a trusted family member or have been approached by a likely buyer, you will need some help in marketing your business effectively and deciding on a sale price.
This will mean some considerable legwork on your part and there are a few options. Here are the most popular routes to selling a business:
Find a business broker
A business broker will effectively act as an intermediary between you (as the seller) and potential buyers of your business. As such, they will carry out a full valuation of your operation and will assist with marketing the business.
They will also handle initial approaches from prospective buyers and may already know of interested individuals. If you’re worried about your competitors finding out about your attempts to sell the business, then you can rest assured that a broker would be expected to act with full confidentiality at all times.
When considering a South African business broker, it’s important to remember that they will expect to charge a service fee, which will usually represent a percentage of the final, agreed sale price of the business.
Seek a formal valuation
You may decide, of course, that you would rather avoid paying a fee to a specialist business broker. Instead, you may have it in mind to advertise the sale of your business directly to potential buyers.
Before you can go about making a sale, you’ll need to understand what would constitute a reasonable sale price. To do this, you may want to approach a professional business valuation expert.
They will be able to produce a valuation that is based on firm foundations. They will take a look at your financial statements, order book, and business assets. By this information, they will provide a valuation and an associated report. This will certainly add weight to your argument when you are discussing a sale price with potential buyers.
It may be the case, however, that the suggested value will be lower than you had hoped. If this is the result of the initial evaluation process, then you may wish to consider a second opinion. It’s also worth noting that a buyer is likely to seek an independent view, before making a commitment to purchase.
Spread the word
If you want to give yourself the best chance of making a sale, then it’s important that you let others know that you are looking to sell. This is likely to mean getting in touch with friends, business contacts, and other interested individuals.
You should also consider the fact that existing or former employees could be interested in buying the business from you. It’s only by having conversations that you will find out if there is interest out there.
Make use of business forums
There are numerous other avenues for advertising your business. In particular, think about magazines, newsletters, and websites that are specific to your industry. These are good locations for catching the eye of other small business owners within your niche.
You might also consider business websites that have a broader audience. It will make sense to focus your initial efforts on sites that target South African residents, although you may wish to broaden your focus over time. Ensure that you have a clear overall strategy in mind. It may also be helpful to set yourself some target timescales. Many business owners start out with the idea of selling the business in a direct manner but decide to change course, after failing to get results within a period of time. You may decide to do the same. If you’re unable to find a suitable buyer for your business, then a business broker could offer the best option.