Selling a Business: 5 Steps to Letting Go of a Family Biz

selling a business Australia

Few decisions are as difficult as selling a business, especially a family business. It doesn’t matter if you’re selling at a loss or for profit, there are probably more hang-ups involved here than quitting a job or moving to a new home.

However, there’s no reason to fret. Keep in mind this is a practical move. This can help in holding emotions at bay. The process is easy enough, but how do you facilitate the sale of a family-run business?

Here are five strategies to help you navigate this, from preparation to closing when selling a business:

Step # 1: Talk it out with your team

selling a business Australia

Selling a business your family owns is unique because some employees are likely close friends and relatives. Have you tried telling family you’ll have to let them go because the business is to be acquired? Be prepared to deal with frustration, disappointment, and a lot of questions before the meeting is through.

It’s best if you talk with them way ahead of the sale. This provides time to process the news. Listening is one thing you’re supposed to do during the meeting. Let everyone air their side, compose yourself and respond if you have to.

Step # 2: Have a disinterested party conduct the business valuation

selling a business Australia

Running a family business for many years can skew your perception of value. Often the asset’s sentimental value is mistaken for practical value. Hiring service to conduct the appraisal is a crucial step. You’ll have a realistic estimate that’s competitive with the benchmark price.

A disinterested party prevents you from overestimating the value when selling a business. On the flipside, you might also realize the business is worth far more than what you initially thought.

Step # 3: Draft a short list of negotiable and non-negotiable terms

It helps to have this list handy! Are you good with selling everything including the kitchen sink? Which fixtures or equipment would you hold back to keep a fair deal in a compromise? How much are you really willing to settle for, when push comes to shove?

You need to deal with the hard questions now so you’re unfazed later on. Keep in mind there are many negotiable options in selling a business. Price is but one of them. Anticipate curve ball offers, and have contingent counters in mind. If an offer is too low, for example, you might want to keep equipment and furniture to compensate.

Step # 4: Timing is crucial

selling a business Australia

The waiting game is on, and you have to know when to hold or fold. The rule of thumb in getting a good price is: sell when a buyer is ready to buy, not when you’re ready to sell. This sounds counterintuitive, yes, but remember buyers are out to score deals. Your willingness to score the deal can be perceived as desperation, and no bargain is off-limits to the desperate.

If you’ve been planning to sell the business for quite a while, don’t wait for the last moment before you make a move. Keep watch on the market. Scout for potential buyers. Don’t hesitate if you find one with an offer you like, because you never know when a sweeter deal comes along.

Step # 5: Hire someone to do your legwork

While selling a business owned by your family is doable on your own, there’s no doubt it’s easier if you have experts calling the shots. If you’re keen on going gung-ho, remember the buyer might hire experts his side to negotiate. It’s best you’re represented to ensure the deal ends up fair and in your favour.

Buyers will woo you to sell their way, which is good because you’re in demand. Having an ally who can help you sort out the riffraff is always an advantage. You never really know what buyers are hiding under their sleeves.

Selling a Business? Let Us Help

selling a business Australia

Square your shoulders and keep a game face on – you have assets to sell! Selling a family-run business takes an emotional toll, no matter how smooth the process is, or how much you’ll gain from the sale. This is why hiring an expert is all the more important. You’ll have an advocate on your side who can showcase your business for sale to potential buyers.

For $299 and not a penny more, zerocommission.com.au will list your business for sale online, keeping it in the radar of serious buyers in Australia. Your listing will stay online until your family finds a buyer for your business. Learn more by clicking here and sell a small business today!

Serious about selling your business? You’ll love these other blog posts:

5 Pitfalls to Avoid with a Small Business for Sale

small business for sale in Australia selling business privately

Do you have a small business for sale in Australia? Selling a business privately is easy if you’re prepared for the process. It’s even easier if you hire help to facilitate the steps.

How do you ensure you get the better end of the deal? Well, for starters, there are a few pitfalls you need to avoid off the bat. Even the most seasoned sellers make mistakes. Revel in the comfort that you’re in good company.

Should you wait or jump the gun? Should you set the price high, will you accept lowball offers? How do you curb your expectations so you’re not disappointed when the deal closes? These questions keep sellers of a small business for sale up at night. Keep a clear head and watch out for these five pitfalls, so you don’t end up selling your business at a bargain.

Pitfall # 1: Doing it all on your own

small business for sale in Australia selling business privately

Don’t assume you can pull all the strings, even if you’re confident you know well enough to do so. Note that even the larger companies hire a team of specialists to do the legwork. If cost is a concern, then only hire consultants who’ll advise you on big decisions.

Depending on the size of the business you’re selling, consider hiring specific professionals to divide the workload. Hiring talented individuals should be first on your to-do list, right after you decide to find a buyer for your small business for sale.

Pitfall # 2: Having the wrong timing

small business for sale in Australia selling business privately

Your advisers help you determine the best time to sell, which is dependent on market conditions and the nature of your business. You need people to calm you down, though. Even if the market is up, your business may not benefit from this trend. On the flipside, there’s a chance you’ll miss a good opportunity if you wait too long to sell.

Consultants can point out your blind spots before you make a move when it comes to your small business for sale. Maybe you should improve the business’s financial situation, or wait a few more weeks until the market ripens.

Timing is crucial when selling a business. It’s vital you have experts who can back you up.

Pitfall # 3: Erroneous Expectations

Rookie business sellers should be cautious of setting high expectations from deals. It messes the process, and good opportunities and offers pass by unnoticed. Many consider their business valued way higher than the market price, disappointed when they’re offered low-ball prices, or worse, ignored by prospects.

Here’s one standard you can use to benchmark your selling price: find the median selling price of similar small businesses for sale in your area. You’ll know the high and low limits. You can also set a price that can compete. Advisers also offer great insight on this end.

Pitfall # 4: Failing to plan ahead and setting a timeline

small business for sale in Australia selling business privately

If selling the business was your exit goal from the start, then a strategy should already be in place. In case there’s plenty of catching up involved, then the minimum timeline for the planning is six months. This is a good timeframe if you have a small business for sale.

You need comprehensive, documented financials to present to prospects. These take time to develop. A longer lead time also gives you more headway, building the business until it’s ripe for the picking.

Pitfall # 5: Selling to the wrong buyer

Should you sell to the highest bidder? If money is the end goal (it usually is), then yes. But what if the buyer intends to acquire your business so it eliminates one of the competitors? What’s your motivation for starting and selling the business? Will you allow your novel service hijacked and killed by a competitor?

If the promise of continuity is music to your ears, then you should meet buyers head-on, ask what they would do after the sale. You could be offering something revolutionary, and buyers might toss it aside as detrimental to their business. Be wise when choosing buyers for your small business for sale. Ensure you’re on the same page before you commit.

Have a Small Business for Sale?

Selling a business is not at all difficult if you approach the task the smart way. You have to make the most out of the deal. Think the process through before you sell, and seek the counsel of experts. The investment you make pays off with bigger profits, and a deal that favours your interests in the end.

small business for sale in Australia selling business privately

Zerocommission.com.au is here to help you with your small business for sale. For a nominal and one-time fee of $299, we’ll list your business for sale on the top websites in Australia. Visit our site to learn more about selling a business privately.

We put together a list of other blog posts we’re certain will help you close the deal:

Selling a business? 5 Ideas to Boost Small Business Marketing

Selling a business in Australia small business marketing

If you’re thinking of selling a business in Australia, staying ahead of the competition should be part of your plan. After all, who wants to buy a business that doesn’t have its act together?

Is your small business up against heavy-hitters? Then it’s likely you’re willing to try anything to keep ahead! Great promotion faces the challenges privately owned small businesses face. Considering the stock of your competitors, how can your business shout louder in such a busy marketplace?

Strategy is only effective with proper execution. Your business is a lemonade stand: how can you outsell the kid across the street? You pitch a better case, sell a better product. Marketing is all about perception, and it’s the difference between products and services of equal value.

Here are tips to consider when selling a business in order to boost your chances of closing the sale. Since gimmicks have reputation of being conmen’s tools, these 5 are gimmick-free, sure-fire ideas:

Tip # 1: Give your stuff away, really

Selling a business in Australia small business marketing

This may seem counterproductive for small businesses, but it’s the best strategy if you really take pride in your offerings. You get to attract a larger customer base quickly using this technique, something sure to pique the interest of potential buyers when you’re selling a business.

This tactic works well if you’re selling unconventional products, like beer-flavoured ice cream. Most people won’t bother buying in retail until they appreciate samples; this is why sample stands are so popular.

You shouldn’t skimp on the quantity of the samples, either. In the case of beer-flavoured ice cream, the sample should be a mouthful. If you’re giving away vouchers and coupons, the discount should put a dent on the actual retail price.

Tip # 2: Share your expertise at networking events

The most successful businesses thrive in communities. Go meet like-minded networks of peers and competitors. Who knows, you could even meet your buyer at one of these events.

Never shirk away from opportunities to contribute, especially if you have something of value to offer. When selling a business, you have to continue to build your business. Okay, there’s the urge not to share because of the competition, and for good reason. The rule of thumb is to offer anything that builds the industry, short of compromising your business’s advantage.

Networking is crucial if you’re service-oriented business. No conventions scheduled in your area? Then organize one. And don’t pass up the small gigs. Remember it’s all about contributing to community and networking when selling a business. The headcount of events shouldn’t be an issue.

Tip # 3: Maintain a regular podcast

Selling a business in Australia small business marketing

It’s PBS on the internet, and you have full control of the content. If you’re plugged in to the community, then a regular podcast sweetens your prospects, both customers and potential buyers when selling a business.

Invite interesting guests to your shows, or even competitors (an adversarial approach always works). Talk about topics relevant to your audience, your clients and customers.

People love to share their stories, and a podcast is excellent platform for moderated discussion. You’ll establish meaningful ties with listeners as you educate them on topics you’re passionate about.

Tip # 4: Email updates to your customers

Build relationship with your customer base, but make sure you send email worth reading! Spamming your customers with the day’s best deals doesn’t help, unless this is part and parcel of your enterprise’s nature.

Some businesses send email once a week, others whenever there’s something of value to share.

The goal of emails is consistency, reinforcing your business as a reliable brand. Content should also be personalized, or at least relatable. Take your cues on email lists you’re subscribed to–what convinces you to read these regular updates?

Tip # 5: Support causes and organizations

Selling a business in Australia small business marketing

There are plenty of causes to participate in, but you should have vested interest in these prospects. An Earth Day event should promote your brand as cost-efficient product or service. A charity food fair must market your product as the healthier alternative. Open your mind when selling a business is your goal. Be creative.

Charities and cause events are selfless affairs, but it’s also opportunity to promote your business as a viable brand and as a great deal. Your competition is maximizing on this advantage, so there’s no reason not to follow suit.

The Key to Selling a Business

Pull all the strings you can as you build your brand, take advantage of marketing tricks at your disposal. As a small business, what’s important is interested parties consider your business better than the competition. Drum up interest with promotion, and then back it up with products and services that deliver to expectations.

Want to get ahead of the game when selling a business? Zerocommission.com.au will list your business for sale on the top websites in Australia for a one-time nominal fee. Learn more on our site and sell your small business today!

Check out these other blog posts we’re sure you’ll enjoy:

4 Common Mistakes You Must Avoid When Selling a Business

selling a business Australia for sale by owner

Are you attempting the feat of selling a business? This is not like the smaller goal of, let’s say, selling a mobile phone, your second-hand clothes, or even a car. Selling a business isn’t difficult but mistakes can be made.

Each day owners of small businesses around the world commit particular mistakes when trying to sell their enterprise. Learn from their blunders instead of committing these errors yourself.

We put together the 4 common mistakes to avoid when selling a business. Knowing and avoiding these tips can easily save you thousands of dollars.

Mistake #1: Failing to do promotion/marketing work when selling a business

Don’t fall into the trap of assuming a third-party will do the necessary promotional work for you when you’re trying to sell your business. Nobody knows your business more than you do.

Even the most expensive or most experienced broker will not be as passionate about your business as you are. You’d be very hard-pressed to find someone who knows the inner workings of your own establishment as much as you do. If being motivated about selling your own business were a contest, you’ll be sure to take home the first place trophy. And there’s no doubt about it.

This is not to say you don’t work with third parties to help sell your business. But don’t just sit back and wait for someone else to do the entire marketing job of selling your business for you. Share the post on your social media. Email and share the link of your business for sale to friends and colleagues.

Potential buyers would, of course, want to talk to the previous owner. Your level of experience and expertise about the company will be way ahead of anyone else. Communicating with the buyer directly will seal the deal and help you sell a business faster.

Mistake #2: Failing to plan ahead or refusing to sell at the right time

selling a business Australia for sale by owner

Trust us, you don’t want to wait too long or fail to plan the sale of your business. Selling a business is not as simple as selling some tangible item. There’s a window of opportunity that you just can’t miss.

Planning for the long term is crucial if you want to close the sale. You can’t just decide to sell a business on a whim. This means being meticulous about your records, providing interested buyers a comprehensive history of your company and keeping a portfolio about your business.

Your thorough planning won’t be put to waste if you’re looking to sell a business. Have all the records and your pitch ready so that when an interested buyer comes along, you don’t have to scurry and put together a sloppy mess of a proposal. No potential buyer will be impressed.

Mistake #3: Selling a business to an unfit buyer

Don’t just grab the first offer you see, unless there’s a concrete reason why you’re looking to sell a business fast. Remember that the first offer is probably not the best offer you can find.

Is someone offering to buy your business with no deposit yet wants a lengthy contract? This is a blatant red flag.

The proceeds of the business can go south after the new owner takes over. Without any money down, you could be left dealing with the failure of a business you thought you were retiring from.

Be wary of any potential buyers who lack experience in the business arena. The new owner may lack business experience, have a closed mind or be a poor leader. Ensure the details of the sale benefits you and meets your goals. This means knowing why you’re selling your business in the first place.

Mistake #4: Over or under pricing your business for sale

selling a business Australia for sale by owner

Now is not the time to be unrealistic. You don’t want to waste anyone’s time by setting the price too high or too low when trying selling a business.

Are you expecting too much for a business that’s not generating steady income? This is where meticulous planning plays a vital role. Consider factors such as your competitors, industry, customers and current market trends when pricing your business for sale.

Is your business stuck in a rut, not producing any income? Then you’re going to have to consider a going-out-of-business sale instead of quoting a steep price. What’s the advantage of a going-out-of-business sale? Immediate cash is one. Next, you get getting the business out of your hair. Let someone else, hopefully someone with more experience, handle your enterprise if it’s not making money.

If you’re feeling low and uninspired over a losing business, selling to the right buyer might be the solution. Sometimes cutting your losses and admitting defeat is the better course of action than milking a dried up cow.

But don’t act impulsively either. One common mistake of business-people is deciding to sell based on negative emotions. In effect, they end up pricing their business for sale too low. This is most true when owners decide to sell right after an unwelcome event happens, such as when illness hits or the tangible effects of financial woes. Timing is key.

Research, research and research when your goal is selling a business. Also, careful planning and acting out of logic instead of emotions will help you avoid these common mistakes when you put up a business for sale.

Like these tips? Check out our other marketing tips to help you close For Sale by Owner deals in Australia: