Most owners like yourself get the stage of their business when they ask themselves – should I sell my business or not. The short answer is that it Depends. There are many factors to be considered.
Some of these factors are;
Personal Matters
The business owners personal life. Working long hours could be causing problems at home with marriage or Family life?
Partnership disputes
Partnership disputes are probably one of the most common reasons for Business owners to consider selling. Many business owners get to the stage where they cannot stand their Business partners any more. Many find that the relationship continues to deteriorate. Eventually business starts to suffer and cash flow starts to dry up. It could be a good time to sell out if that cannot arrange to buy out the partner they are not getting along with.
Simply losing interest or tired of taking risks. Most business owners have big dreams and underestimate the amount of work required for running a successful business on a long term basis. Other owners think it is just a good time for a change. The grass is not always greener on the other side.
Is the business running smoothly with good systems in place for a new owner to take over? Having a well-organised business running at its peak is attractive to new buyers. This is usually when business owners could decide to either scale up to another level or ready to sell. It may also be worth hanging on if the owners feel the business can run without them on a full-time basis.
Cash flow drying up
Will the reduction in cash flowafter they have sold their business affect your lifestyle? Many business owners do not have other sources of income and little superannuation to fall back on. The business sale may have to be delayed until they can build up their nest egg.
Real Estate included in the sale
Does the business include real estate? This gives the business owner a few options. They can either sell the business with the real estate, or they can offer the buyers a lease were the sellers retain the property or sell it separately as a passive investment. There are also advantages in both situations.
Selling the business without the Real estate can be easier because it is a more affordable option to the business buying market. On the other hand, selling the property can you open it more to the investment and overseas buyer’s market. Many overseas Asian buyers prefer to buy businesses with Real estate. This also can help them qualify for migration to Australia.
Good Business planning
Planning is critical. Whatever the reason you have decided to sell it is essential that the business is as prepared to maximise its sale price under the existing market conditions. We have seen many business owners get to the stage where they have decided to sell the business either too early or too late.
In fact, with better planning, the whole business sales process would have run smoother and sold at a higher price.
In conclusion, all businesses have to close down or sold at some time. Ensure that you don’t leave any money on the table when you eventually decide to sell your business. Make sure that you start planning now.
Need to discuss your business exit plan further?
Need to speak to someone to help you plan your next business move? For a confidential, no-obligation conversation contact Con Tastzidis on 02 9882 2221 or email on invest@www.cstproperties.com.