Perhaps you’ve just the got the word from your doctor, your health is deteriorating and you need to stop working. Perhaps you’re going through divorce. Whatever the reason, you’ve come to the difficult conclusion you need to sell your business and you need to sell it fast.
You’ve read my article How to Sell a Business where I discuss how to sell your business in order to maximise the final sale price. You’re not going to be able to ensure that you have three years of steady revenue and profit growth. That all the owner benefits are included in earnings and personal costs are removed. That you’ve reduced your dependance on a small number of customers or a big supplier. But sometimes you’ve just got to play the cards you’ve been dealt. Here’s how to sell your business fast.
9 Ways to Sell your Business Fast
1. Lower your price expectations
The fastest way to sell your business is to accept a lower price. You may not get fair market value but you could get still get a good price if you do the other things well.
2. Don’t let them know its an urgent sale
If prospective purchasers hear you urgently want to sell they may think a) there is something wrong with the business and/or b) they can make a lowball offer. They’re likely to move at their own pace regardless of what you say, better to pretend you have all the time in the world.
3. Remove confidentiality
Confidentiality is important because uneasiness about a future owner may result in key staff leaving, your customers defecting, suppliers tightening up credit, and your competitors casting aspersions. This could result in an earnings collapse with the attendant drop in business valuation.
However, having the business name published can also increase buyer interest because they already know something about the business. Similarly it could also increase the number of queries from your advertising.
4. Increase advertising
Usually you would advertise on key NZ business sales websites (trademe, True Commerical, reaslestate.co.nz, bizbuysell), perhaps have some targetted social media advertising, and possibly some print advertising depending on the industry.
In order to increase the reach of your advertising you could extend this into international websites (think kiwi expats as much as foreigners), NZ Herald and Fairfax print advertising campaigns, extensive social media advertising, and industry publication advertising. The ads would be bigger and the budget more $5000-$20,000 than $1-2000.
If you have a business broker then you would choose to advertise in their email or print campaigns as well.
5. Directly identify buyers
Industry buyers know your type of business and with that confidence may make a quicker purchase than most. So within your industry who might be interested? This includes competitors but also suppliers, customers and staff.
Find out their contact details and call them directly. If you’re maintaining confidentiality then you’ll need a business broker. A business broker will also do this nationally, and internationally if appropriate.
6. Vendor financing
Prospective purchasers are worried about risk, and may not be able to get bank financing depending on your industry.
By offering vendor financing, they see that you’re willing to remain exposed to the risk of the business. You also make it possible for them to raise financing to buy the business. Fear not, your loan will charge interest and ideally have business assets as security.
7. Make it optional to buy any land or buildings
In Auckland most businesses don’t own the land or buildings. In the rest of the country business often occupy their own property. In order to make the business more affordable you should make purchasing the land and buildings an option. If they don’t buy the property then you can sell this to a commercial property investor instead.
8. Due diligence
Make due diligence as smooth as possible for the purchaser. Ensure all documentation is available, and have prepared answers to any questions about business issues.
9. Use a Business Broker
Your problem is you don’t have the time to run the business, take care of yourself, and deal with lots of buyers. Leave that up to the broker.
The fastest way to sell a business is to lower your price expectations, keep the urgency secret, possible remove confidentiality, increase advertising, contact industry buyers, offer vendor financing, take property out of the business, ensure due diligence runs smoothly, and use a business broker.
Contact me to discuss selling your business fast.