Selling a Business

Selling Your Business

Selling your business is a complex and time-consuming task. Link Business-Phoenix will carefully guide you through this transition and ensure you are taken care of every step of the way.

Selling Your Business

You have worked tirelessly to build your business. so when it comes to selling; you want to maximize your returns. Through our unique sales structure, LINK’s goal is to maximize your business return, while minimizing the stress of the sales process.

We achieve this by pairing you with knowledgeable business brokers with past experience in your field of business. Your broker will know all of the pitfalls of selling in your industry, meaning you can achieve peace of mind knowing you will NOT be exposed to any potential risks when selling your business.

We split our brokering teams into the following specialties:

  • General Business
  • Health & SPA
  • Automotive
  • Franchise
  • Industrial
  • Trade Subcontractor

Selling Your Business

Selling your business is a complex and time-consuming task. Link Business-Phoenix will carefully guide you through this transition and ensure you are taken care of every step of the way.

How does the negotiation process work?

When a buyer indicates they want to make an offer, this needs to be in writing and in the correct format.  Any verbal offers can become complicated, as they do not detail the terms and conditions of the offer.  As part of our service we prepare a Letter Of Intent and finally a purchase agreement.

We will prepare a comprehensive marketing plan for your business incorporating notes on how to present the business, a detailed Information Memorandum prepared by us, advertising schedule and website and database marketing.  In many cases we find buyers from our database of qualified buyers.  If confidentiality is key and we advertise using generic information and never identifies the particular business.

How long will it take to sell my business?

This will vary depending on the complexity of the business and the industry.  Normally, a properly priced business will sell in six to twelve months.

What can I do to help sell my business?

Have all the information required ready and current.  Buyers want to know current information on the business that can be verified back to tax returns.  Have your accountant prepare up to date financial information.

What does a Confidential Information Memorandum include?

We prepare a comprehensive Confidential Information Memorandum on your business. This will typically include:

Background of the business, highlighting opportunities for a buyer and the reasons for the sale. 
The sale process and description of assets etc. 
The historical financials, trading to date and comment.
The business valuation appraisal. 
Operational matters. 
Information on-premises, including details of the lease. 
Appendices including marketing material, plant and equipment schedule, etc.

All changes are approved by the seller before presented to any potential buyers.

What information do I need to prepare my business for sale?

It is important that you have all the right information and details available before you start to market the business.  A business well prepared for sale will sell more quickly.
As part of our service we will assist you in the preparation of this information and once again it needs to be presented in the right way with the right information. This information is also required to establish the selling price for the business and certain calculations need to be made to work out the true net profit of the business.  Items you should have available are:

Profit and Loss accounts from the previous 2 to 4 years.
Identify and quantify abnormal and/or non-recurring costs in accounts.
Identify all items of personal and drawings nature.
Copies of internal accounting reports for year to date and/or GST returns if available.
Copy of the Lease.
Brochures or information on your product or service.
Background on the business.
Staff details.
List of plant and equipment and any equipment leases.
Copy of franchise agreement if a franchise business.

Like many small business owners, you will probably have to search out these items and some may need to be updated.  Make sure the financial information is current and accurate.  If you’re selling halfway through the year you could get your accountant to prepare half-year accounts for the purpose of selling.

What is my business worth?

This is a very important aspect of selling your business and probably the most contentious.  There will be many views on what constitutes value.  Sellers will have one view, buyers another, accountants another, etc.  There are multitudes of formulations, all of which produce different figures depending on who you’re talking to.
It is important to recognize the price range your business is likely to sell in.  If you’re unrealistic it won’t sell and you and likely buyers will become very frustrated. You could also be harming the prospects of a sale sometime in the future.  If you’re too low, then obviously you miss out or create suspicion.

Businesses sell in an open market that is with a willing buyer and a willing seller.  The market determines the price – the true value.

When we meet with you we will gather detailed information on your business and then present you with a most probable sales price analysis.  This gives you the price range we expect your business to sell for on the open market.  This is not a valuation and cannot be used for that purpose.

For a formal valuation appraisal and opinion, many business owners use LINK to have a written opinion prepared on their business and establish the price range. This is useful in the case of one partner wanting to buy out the other partners, a management buyout or valuation for family estate planning. 

When is the best time to sell my business?

We will schedule a meeting to discuss the specifics of your business and your personal plans for exiting from it. With our experience in business sales, we can prepare an exit strategy for you, taking into account the factors that will be instrumental in finding the right buyer at the right price for your business.
After we have an understanding of your business we will make suggestions on strategies that may be of benefit to you in the preparation of your business for sale. Buyers will be looking for certain things when considering your business and our recommendations can make a difference in effecting a quicker sale at a better price. 

Get a most probably sales price today

How LINK Business-Phoenix determines the most probable sales price of a Business

Our estimation on the value of the business is most often given on a Going Concern basis.

We look at the sustainability of earnings based on historical and current earnings. Potential buyers will want to examine a business’s ability to maintain its profitably into the foreseeable future.

We offer a comprehensive report which covers all aspects of the business, taking into account the following:

  • Supplies financial documents
  • The business make-up and infrastructure
  • Its applicability to its market sector
  • Certain risk factors and the market within which it operates.

We believe that business value is correlated to:

  1. The industry average multiplier on true earnings. This factor relies upon the market and may differ due to the perception of certain industry risks, the sustainability of earnings and historical transactions.
  2. The market worth of the unencumbered assets (e.g. plant, fixtures, vehicle, equipment and in certain cases the value of debtors) equals the worth of stock at historical cost.
  3. Intangible Assets. Due to the immeasurable nature of Goodwill and the numerous aspects that encompass this asset, the method of valuation used will rely upon the circumstances of each specific business. No sole method can be employed for every single business as each will have differing features regarding the combination of tangible and intangible assets. We can offer the market evidence of required ROI for business investments with multiple degrees of risk.