Q: What is my business worth?
A: To understand what your business is worth on the market, it’s best to complete an appraisal with a business broker. A business broker will conduct a comprehensive appraisal, which examines key financial metrics, industry trends, and the specific attributes that make your business unique.
Q: Should I get an appraisal or valuation?
A: A valuation is an extensive document created for a fee and can be used in court if necessary. An appraisal is complimentary with no obligation, this is based on real-time and local industry-specific data.
Q: What documents do I need to prepare before listing my business?
A: Key steps include organizing financial records, documenting operations, and identifying unique selling points. A broker will work with you to highlight these factors to attract qualified buyers and streamline due diligence.
Q: How do I find the right buyer for my business?
A: The MMJ Business Sales team works with qualifying potential buyers who respond to the advertisements or may be in our database. Qualified buyers will have completed a confidentiality agreement and have shared their experience.
Q: How long does it typically take to sell a business?
A: Selling a business typically takes longer than a home sale, averaging around 9 months. It can vary based on pricing and industry demand.
Q: What role will I play in the business after the sale, if any?
A: The buyer may ask the vendor to stay on for training or an extended period of time. A training period is usually a standard of 2 weeks after settlement and helps the purchaser transition and receive a handover. The vendor may need to stay longer as a paid employee if agreed during negotiations.
Q: Should I renew my lease before selling?
A: Review and where possible modify all property leases so that they may be re-assigned to the new owner.
Q: How will selling affect my employees, and what steps should I take to manage the transition?
A: Usually, the vendor will pay out any entitlements (annual leave) up to settlement and the purchaser can issue new contracts as the employees will transfer to them.
Q: Should I put a manager in place and make my business ‘under-management’?
A: The less reliant the business is on you, the more attractive it is to buyers. Under-management businesses often sell for a higher multiple of profit.
Q: Is it a good time to keep growing the business?
A: Yes, try to sell with a history of growing revenue, not when things are winding down. If you are running at peak performance, holding off on selling is a gamble.
Q: What is S.A.V?
A: This refers to ‘stock at value’. Stock is the inventory of goods held at a business. For example, in a bar, this would be any alcohol. The total S.A.V is then calculated at settlement.
Q: What are my assets?
A: Business assets are anything of value that a business owns and can use to run its operations or generate income. For example, in a café, this could include any vehicles or a coffee machine.