Mentoring the Business seller – Mentoring the ingoing Purchaser to your business
Business Owners and Brokers alike need to work with the knowledge and awareness of an ever changing market place. We are entering a new (although delayed) era of a “Baby Boomer Sell-Off”, which is showing signs of gathering momentum. Many long standing and successful businessmen have put their life’s work towards building, nurturing, guiding and growing their business to levels of varying success, whilst others have become icons and/or household names. Ultimately, all these businesses will reach a point of needing alliances, seeking mergers or simply just being disposed of. And God forbid, in many instances, the stark fact of unexpected health issues may also precipitate an untimely disposal of a business.
We are becoming more and more aware that many business owners are going about their business on a daily routine without any thought as to making their business saleable or desirable to a new evolving market place.
The market place may very well be accepting of the dynamics and interpretation of “average” or “average result”. But, not if one has invested forty or fifty years of one’s lifetime into building a successful and viable business.
Selling a business has become a complex and involved endeavour on the part of the business owner and requires specialized advice and strategy on the part of an astute Broker.
Buyers will drill into every corner of your business to ensure they are buying a good business.
The “Baby Boomer flood gates have already opened and 1,000’s of businesses will come onto the market in the next year or so. 90% of these business owners will not achieve what they expected for their business. That is, they will not achieve an adequate profit on the sale of their business.
Another sad statistic (provided by Bond University), is that less than 10% of businesses will be sold.
Profit on the sale of your business is the ultimate prize as the true reward for the effort, energies and risks of being in business.
Why does this happen? Because the business was not sale ready, there was a large gap between what an owner thought his business was worth and what a potential purchaser is prepared to pay.
Each business for sale requires four major aspects to achieve “true value”.
- A detailed Business Plan
- A clean and uncomplicated business for the new owner to just move forward (hit the ground running).
- The ability for Vendors to answer thoughtful and prying questions about their business and….
- A clean sheet of Profit and Loss statement