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Address
Lvl 2 381 Port Hacking Rd Sth
Caringbah NSW 2229
Australia

Telephone
1300 668 200 (Within Aust.)
+61 2 9531 1444 (Outside Aust.)

1. When is the best time to sell a business?

A. The best possible time to sell is when the business is doing well. Buyers are attracted to a history of growth or at least consistent results. Likewise they are concerned when the sales and profit are in decline and may still buy but will want to negotiate a suitable purchase price to compensate for any risk.

2. How much will it cost me?

A. Commissions in the industry fluctuate between 4% and 8% of the purchase price depending on the Broker used and other variables like the value of your company and the industry you are in. You will also pay for a solicitor to draw up the contract for sale. Our experience is that this is normally charged by the hour and will vary according to the complexity of the sale. Some of the issues that will add to the cost are transferring leases on buildings and plant and also transferring of employees and their entitlements.

3. Will I pay a listing fee?

A. Yes, most Brokers will charge a listing fee. The listing fee covers everything that the Broker does to prepare your business for sale. Some of these activities include writing the business profile, adding the business to the web site and drafting advertisements. This is then deducted from the total commission payable when your business is sold and you pay the balance. In the event that the business does not sell for whatever reason, this fee is not refunded.

4. Are the advertising costs on top of your commission?

A. No, the advertising costs are deducted from the total commission payable and you pay the balance. A Broker will ask for an advance for advertising fees which will vary according to the marketing plan. For example, if the best place to attract buyers for a particular business in the Australian Financial Review this would be more expensive than say the Herald or Melbourne Age. In the event that the business does not sell for any reason, any advertising funds paid by the vendor are not refundable.

5. How long does it take to sell a business?

A. We are often asked this question and it is probably the most difficult to answer. There are four main factors that will influence how quickly or otherwise your business is sold. They are:

i) How accurately the business has been assessed in relation to the final selling price. Many businesses will sit for months at an inflated price until the market conditions result in the vendor reducing the price to what the market is prepared to pay. If you are looking to sell reasonably quickly, care should be taken that the business is listed at a realistic selling price.

ii) Your business must be profitable. In some cases the true profitability is only evident after adding back the owners benefit to the profit shown in the profit and loss. Buyers are very scarce for any business, where the return is simply not worth the effort.

iii) The industry you are in has an enormous effect on how many potential buyers there are for your business. As an example, we have had some trades based businesses that have been priced exceptionally well and have still not sold because of the level of attractiveness to buyers. Alternatively any manufacturing or distribution business will attract a lot of attention.

iv) Any proprietary products, patents and brand names will also make a difference. This gives a point of difference to a buyer and provides more substance to what their money is actually buying.

To summarise: If you have a profitable business in an attractive industry, if it has been assessed accurately and realistically, if you have your own brand names and products, then your business should be comparatively easy to sell.