Don’t believe the hype.
An overvalued estimate by a broker in the hope of listing you, will damage your ability to make key decisions. Good business brokers will give you a fair and honest appraisal based on the market – not as a way of securing your listing. Managing expectations is a core element of successfully buying or selling a business in Auckland and Company Sales can give you an accurate assessment of your business value.
Once your business is valued, the sale process is governed by the terms agreed with you, so it is vital that everyone is on the same page. Finding the right buyer – who is not just interested in the price but able to actually operate the business – will allow the sale process to achieve the best price and terms for both buyer and seller.
Listing with an A+ business broker and following diligent and transparent process means client involvement can be kept to a minimum. You need to concentrate on keeping your business ticking and in healthy order, not being distracted by the ins-and-outs of the sales process. Company Sales conducts negotiations (away from your premises to give you added privacy), identifies buyers from their extensive database list and qualifies potential purchasers. Confidentiality is of the utmost importance at all times. Along the way, your broker will help analyse and evaluate offers and any special conditions associated with the sale.
The ingredients of a good business broker
- Integrity: They need to earn your trust. After all, they are dealing with your livelihood – and what is likely to be your retirement funds!
- Experience: It takes a long time to learn the ins and outs of the business sales game. It is complex; each transaction can be a lengthy process and involving skilled negotiation, accountancy, and business nous.
- Assessment: with knowledge gained from selling similar businesses in Auckland.
- Lateral thinking: A capacity for lateral thinking is essential to get around potential deal-killers which arise. Having been down the path many times enables you to see problems coming before they hit.
- Empathy: to hold negotiations together in complex transactions.
- Negotiation Expertise: Probably the most important role. We know the virtually unlimited variations that are available in structuring a sale. This only comes with experience.
- Market values: Every business is unique and valuing them is a complex skill. Requiring market knowledge
- Exposure: The Broker will ensure your business is exposed to the maximum number of eligible buyers ensuring the price is maximised
Why sell through one brokerage?
A sole agency process provides better results for the vendor every time. Selling a business is not like selling a house! The process requires the commitment of all parties to achieve an optimal result. Unlike a house, a business is dynamic and in a constantly-changing environment. For this reason, a business sales specialist needs to create a level of empathy and trust with both owner and purchaser sufficient to work through potential ‘deal breakers’ that can arise during the process.
With a general listing, the business owner can expect:
- Rushed or limited preparation – risking future litigation…
- Compromised confidentiality through wide exposure to as many potential buyers as possible as quickly as possible
- Discouraging potential buyers who cannot act immediately. Big decisions take time for people who want to make smart choices.
- A bias to accept first offers as soon as possible for a quick sale – before a chance to compare or negotiate competitive counter-offers.
- Pressure to accept a discounted price to offset uncertainties or lack of information that cannot be determined due to time pressure.
So the pitfalls of the general listing process is a race to produce a buyer at the minimum price acceptable. By using a sole agency, ‘feedback loops’ in communication enables dealing with objections and questions, that will inevitably arise, in a clear and steady way.
By appointing a sole agent, a business owner can expect:
- Targeting of purchasers in order of suitability.
- Time to evaluate the business correctly at each stage.
- Commitment to the project, confident in a process that is appropriately managed.
Your Company Sales broker
A successful sale is a team effort, with Vendor and Broker working together with professional advisors to achieve the best result. Pooling of resources is essential for an optimum result, as each party can contribute their own unique knowledge and experience to the selling equation.
- Optimising the relationship between price and terms.
- Meeting the Vendor’s time frame.
- Protecting the Vendor’s confidentiality instructions.
- Conduct operating within the REAA Act 2008 and its various rules.
- Professionalism – Acting with and in the best interests of the vendor.
We ensure a successful outcome
- Investigating and understanding the business sufficiently before attempting to appraise its value.
- Preparing a professional Information Memorandum that invites the reader to take the next step and accurately reflects the business in its essence, thereby avoiding misunderstandings.
- Planning and executing an effective marketing strategy.
- Reconstructing your financial accounts if necessary to truly reflect the performance of your business. e.g. eliminating or highlighting discretionary or non-recurring costs.
- Competency in valuing the business, possessing relevant market information and having the necessary experience.
- Helping both the Vendor and Purchaser understand the selling process as prescribed by legislation, including the structuring of offers.
- Negotiating persuasively to achieve a ‘win win’ result. The new purchaser must be appropriate for the business and buy the business on terms and conditions that meet the Vendor’s objectives.
- Communicating, persevering and coping with the ever-changing business and its environment.
If you would like to enlist the help of one of our experienced Auckland Business Brokers, please get in touch with us today.