The Process When Selling A Business
1. Preparation & Presentation
A very wise person once remarked that he would use eleven hours to sharpen his axe if he was given twelve hours to chop down a tree. The same analogy is present when you prepare to sell your business. The whole process should progress smoothly and efficiently if you take time to prepare properly. When compiling your presentation, focus on the strong points of your business as that is what would attract potential buyers. BizCom has a proven method of preparation and will provide an impressive presentation which will be presented to prospective buyers.
2. Determine a selling price
This could be the most important part of the selling process. It is vital to price your business correctly. A business which is not priced correctly is likely not to sell. There are numerous methods to employ when evaluating a business. It is advisable to acquire the help of a professional when determining a price due to the fact that the selling price will be subjected to a lot of scrutiny from numerous financial experts during the selling process. Our business practitioners are experienced and are familiar with the most popular and appropriate valuating methods and will assist you in a professional capacity that will enable you to get the best price for your business.
3. Marketing your business
It is of vital importance that your business is marketed very discreetly. You don’t want everybody to know that you are selling your business, especially not your staff. Before BizCom commences with its marketing process, we will attempt to match your business with database that consists of numerous qualified buyers. In the unlikely event that no match is achieved, BizCom will embark upon a discreet marketing process in an effort to get you the best possible match for your business. BizCom successfully employs a number of social media platforms to achieve maximum marketing results.
4. Qualifying buyers
If you have a willing and an able buyer you are almost there. As soon as a buyer shows interest in your business, BizCom commences to qualify the buyer in terms of financial ability. As this is a highly sensitive subject it is conducted with the utmost diplomacy but it is essential that a clear picture regarding the buyer’s financial ability is acquired. Buyers who are not willing to reveal their financial status are not considered as qualified.
5. Letter of intent
Letter of Intent is a written document that outlines a preliminary agreement between two parties regarding the terms of a potential purchase or other transaction. Think of it as a road map as to how the negotiation and deal will proceed. The two parties can settle on certain terms while agreeing to continue to negotiate the other terms and details of the transaction before actually signing an offer to purchase (OTP). The parties can sign this document to show each other a good faith intention to work out a deal. It can also assist the parties to get onto the same page as to what they expect from the purchase. The buyer indicates his intention to purchase the business by signing a letter of intent. BizCom will always link the letter of intent to a deposit to be paid into BizCom’s trust account. This will indicate the level of commitment from the buyer. Information which is commercially sensitive is usually not revealed at this stage.
6. Due Diligence
During this stage the buyer and his advisors are awarded the opportunity to confirm the all the information, about the business, which the seller has revealed to them. At this time the buyer could also request additional information about the business which has not yet been disclosed to him, due to a nature of commercial sensitivity.
7. The offer to purchase (OTP)
Once the buyer has completed his due diligence and acquired all the necessary information and he is satisfied, the process proceeds to the drafting of an offer to purchase. BizCom will be responsible to draft the OTP. This will be done in collaboration with BizCom’s legal associates. The OTP will contain all the terms and conditions of the sale. Once the document is signed by both parties it becomes a legal binding document. When all the suspensive conditions have been met and the balance of the purchase price paid, the sales process is almost completed.
You will hand the keys and passwords to the new owner on the effective date. This is your last day as the current owner. Before this date a final stock take is conducted and the buyer settles the stock amount with you. In order to assure continuity, you might be required to stay on for a period of time to assist the new owner. The handover completes the sales process.