Preparation is the key to a successful campaign. Our clients are asked to provide a good deal of information. There are a series of questions almost all potential buyers will ask. The professional way to address these questions is to provide the answers in the Information Memorandum. In this way the prospect can get a thorough feel for the business before coming back to us with his or her own particular requirements.
The marketing campaign needs to be thoroughly planned, quick and decisive. If advertising drags on over a period of time people think there must be something wrong with the business.
We are team players. We work closely with our clients, keeping them informed of each development and bringing them into negotiations at the appropriate times. During the very active stages of prospecting and negotiations clients get a constant stream of emails and phone calls.
"It aint over till it’s over." We never take the sale for granted till the money is in the bank and the cheque is cleared.
Before giving information to anybody they are asked to sign a confidentiality agreement. Hire Industry Brokers are very discreet and above all do not give any indication that a particular business is for sale to staff, clients or competitors of the vendor, or to anyone else at all other than people we see as being genuine prospects.
Hire Industry Brokers only list a small number of businesses each year. We only list businesses we believe are realistically priced and saleable. This allows us to put a lot of thought and maximum effort into getting a positive outcome for each of our clients.
The following article first appeared in The Official HRIA Industry Quarterly August 2007. Written by Don Wilson, titled Selling Your Business.
Most of us get to the point where we want to reap the rewards of all the hard work we have put in over the years. Sooner of later you will decide to sell. This will be one of life’s major decisions and needs to be treated as such. Thus there are many questions that need to be answered.
A first consideration should be:
A: Whether you want to sell now or later, don’t stop spending. No one wants to buy a business when the equipment is allowed to deteriorate. Keep spending on the latest equipment and keep up your repairs and maintenance.
B: Keep your equipment register up to date.
C: Make sure your paper work is in order and your accountant has the balance sheet done promptly.
D: Manage your business the way you always have. If staff needs to be changed in any way, do it.
E: Look at your business objectively and fix any problems.
F: If the business is of a substantial size and is dependent of you being there every day, promote or find a manager to replace you. The new buyer will expect the business to be in good shape to carry on without your. It has most likely taken you years to develop an efficient, loyal staff. Your buyer will appreciate this and want to acquire the existing staff with the business. They do not want to “bring in their own people”.
G: Engage the services of a consultant or business broker to provide you with the professional advice you will need to present your business for the most value possible.
A: The simple answer to this daunting question is - The business is worth what someone will pay for it.
B: There are as many ways of valuing a business as killing a cat. To name a few, Multiples of EBIT, (net profit before tax, plus owner’s wage and fringe benefits, interest and leasing expensed, less cost of replacing the owner in the business.)
Market of depreciated value of the stock and equipment plus a less multiple of EBIT on turnover. Traditionally this was dollar for dollar as a rule of thumb, these days there can be big variations either way.
On small businesses it can be valued on return to owner. In these instances wages, fringe benefits and profit all go in together. This last method is most often used by the person who wants to buy a job. It is used in valuing micro businesses from a few thousand dollars purchasing price. Buyers for these businesses thin out as the price gets higher and cut out altogether at about $300 000.
That’s the 64 dollar question. Depending on the size, location and equipment hired, it can be anyone from corporations, investors, small business people and superannuees to mums and dads. Sometimes the prospects are easy to find, mostly it requires a lot of experience and expertise, which is on of the reasons people use brokers.
This varies according to who you are targeting. Some businesses are obviously going to be attractive to bigger players in the same industry. Your broker will probably be aware of which companies to contact. If so, this will cost you very little in advertising costs. At other times prospects need to be flushed out with advertising. In the latter case you need to spend money on advertising to attract enquiries. Your broker will advise you on the most suitable type of advertising and on what you will need to spend. You probably slots of money promoting you business to customers. You may need to do the same to secure a sale at a satisfactory price.
Do you handle your own legal work? Do your own accountancy? Cut your own hair? Pull you own teeth?
Handle the sale from start to finish, while you get on with running your business. Give market appraisal of price; Prepare a marketing plan; Market the business; Find and follow up the prospects; Advise you on how to play your part; Liaise with accountants; Liaise with solicitors; negotiate the conditions of the sale; Create a process of confidentiality; Protect your interest.
Just use any broker at all who has owned a very successful hire company and has had 50 years of sales, marketing and negotiating experience.
The following is a full list of brokers who meet the criteria:
Hire Industry Brokers. Licensee Don Wilson Phone (02) 9958 0007 Mobile 0417 285 871 Email: gdonya@bigpond.com
Once you decide you want to get out, the soon you sell the better.
A well prepared, well managed business realistically priced can sell in a matter of weeks. If the business is flawed or overpriced, on in a town or district that is not desirable, it can take several months of it may not sell at all.
Disclaimer: This advice is given in good faith and is of a general nature. For advice specific to a particular business you should consult your accountant or solicitor.
This page last updated 28th May 2008.