PREPARE YOUR BUSINESS FOR SALE - The Business owner's Life Raft

PREPARE YOUR BUSINESS FOR SALE

The Business Owner’s Life Raft – by Mark Corke


Good Morning Bloggers

For a while, with his permission, I will be posting articles from Mark Corke of Suitegum.

Mark is a Business Broker, who writes articles on, and runs seminars on “Preparing you Business for Sale”. Should you wish to register for some of Mark’s free articles and tips, Here is the link.

Both Mark and I are of the opinion that ensuring that your Business is Prepared for Sale at all times will ensure that your business always commands the highest value. It actually increases the value of your Business quite considerably.

Now consider this

Whenever I meet with another seller of a business I am asked the same questions:
How long will it take to find a buyer?
How will you avoid letting my customers, staff and / or suppliers finding out that the business is for sale?
What will happen if the buyer doesn't pay me?
How much will it cost me?
How do I stop the competition from finding out I am for sale?
What risk am I running with respect to SARS?
What do I do if I don't trust the buyer
How do I cancel my sureties?
Straight forward important questions; right? Well of course they are, and they all have good easy answers. But when I start asking the questions, and looking for essential documents always needed to Prepare your business for sale, there is almost always an embarrassed shuffle as the excuses are wheeled out. Sometimes it takes months to get the stuff. And all this while the owner is available to talk to any buyer who may be interested.
I cannot tell you how many times I have been asked to sell a business in a hurry.
"I will take any reasonable offer."
"I don't know how to run my wife's business, and I don't have the time."
"I'm getting divorced, and my wife wants the business."
"We've had enough, and we're going to emigrate. I need my money by December."
Why condemn yourself to this unhappiness? There is an easy solution, you know. What's more, it is so easy if you are already running your business in a slightly better than basic fashion.
Whenever I meet with buyers of businesses, they ask me the same questions: ·
How will the seller prove his turnover?
How does he arrive at that selling price?
What will happen if he loses his biggest customer?
Where is the value?
What are the opportunities?
How do I know that he's not a con artist?
Why is he really selling?
How do I determine the real fixed costs?
How do I deal with his staff?
How am I going to learn to run the business?
I'm not sure I trust the seller. How do I deal with this?
What other information can you give me besides all these numbers?
Why do I have to take so much stock?
The vehicles are all shot – do I need to take them?
What you really need to do in order to pump up your shareholders' life raft is start inflating it with tools you already have. Your raft will have all the answers any potential purchaser of your business is looking for.
And this is exactly what "Prepare your business for sale" will show you. Not only will it give you the tools to pump, but it will stock the raft with all the life surviving necessities, plus a few humble luxuries.
There is no substitute for building a relationship. Selling a business is not akin to selling second hand cars. We are changing people's lives here. Let's do it with some empathy and understanding. We are the experts, we do it every day. It is our duty to look after both seller and purchaser.
"From the signing and acceptance of the offer, until the final payment, Mark was constantly involved, and did not take the attitude that he had received his commission, and it was no longer his problem. Mark I salute you for the work that you did, and the friendship that we established." Len Birger
You know, sellers give us their all in order to make these sales work. We must give everything we have to make the deal go through as efficiently as possible, so that's what we do.
"I wish to express my gratitude to you for the for the efficient, honest and professional manner in which you brokered the sale of Jardine Foods. I will be recommending your services to friends and associates" Doug Jardine
I've been doing this for 17 years. I've made a point of learning more each year, so that we have 17 individual years of experience, and not the same year 17 times.
"If you are looking for a professional, Mark Corke from Suitegum is your man" Renier Richter
By following our techniques, nobody need ever know that your business is being sold, or in fact that you have prepared your business for sale, if this is an issue for you.
Great news for business owners who think their businesses will never be sold: Not only will your business be sold, but you will use the proceeds from that sale to improve your life and leapfrog your dreams to a higher level.
Join me for some good advice and solid pointers as to how you will create a life raft of opportunity in your business, ready to be launched at short notice.
"He is focused on the interests of both seller and buyer and is not hesitant to voice his opinion and offer sound advice. He is approachable and patient and it has been a pleasure dealing with him" Zoë Cohen
A while back a lady called me because she needed to sell her husband's business in a hurry. "Well then I need to talk to your husband", I told her.
Unfortunately, that wasn't going to be possible because he was lying in intensive care, having suffered a stroke, I was informed by a tearful and panicky wife.
It transpired that she did not know where the financial records were kept, had no idea of the contracts that were in place, and that was just the beginning of the nightmare.
Another business ended up, itself in intensive care, when the new owners eventually took it over because of the way it suffered after the old owner was diagnosed with cancer.
The shock and horror at the diagnosis, the mounting medical bills and the quickly deteriorating health of the owner had all conspired to leave his widow with a business worth little more than the auction value of the tools and equipment.
Sadly, less than six months before this calamitous event, the business would have been worth R3,000,000 to a buyer. But because the business was not ready for sale when the diagnosis was made, the owner had no choice but to place an ill prepared business on the market.
By the time the chemo and radiation treatment had taken its toll, there was nothing he could do, and when he died, there was nothing his wife could do.
Contrast these two events to the following: Last year a widow came to see me with her son. Her husband had died unexpectedly, leaving her with a flourishing business in a niche market. The business had been running for only eight years, but had always been kept in a state of readiness for sale.
The management team, although loyal, hard working and honest found themselves with a possible windfall at the expense of the widow, and offered her a price of R2M for the business. This would have solved many of her day to day problems of keeping tabs on a business which she did not really understand. Together with the life insurance settlement she would have been able to survive.
She came to see me to get some clarity on the deal. I went through some pointers on the business, and showed her how she could get R7,000,000 on the open market for her business, so well prepared had her husband kept the sale readiness file.
She settled on R6,000,000 with the management team who had a good empowerment element to their ranks, and are subsequently taking the business to even greater heights. Everyone has won, and she will never have to worry about her future.
Which scenario would you rather be part of? By subscribing to "Prepare your business for sale" you will be set to have a life raft able to give your family the same or better results in the case of your untimely demise.
A business we sold a few years ago had been on the market for a year. The owners and several brokers had been marketing it at R1,7M for a 50% share in the business. Using the techniques I am going to show you in "Prepare your business for sale" we made some small changes to the business, introduced an entirely new bracket of interested investor, and sold the whole business for R10,5M, only three months later.
The emigrating partner who had been relying on the proceeds of the sale to finance his emigration, found that he could leave some of his money behind in South Africa!
It is surprising how few businesses are prepared for sale, and it is sad to report that as a result, so many businesses are sold below par.

Do you feel under threat from the BEE revolution? Perhaps you're one of the rare breed of South African entrepreneurs who sees great potential for your business in BEE. Like most business owners, you don't know where to start, vacillating between two extremes: fear and optimism. You may have been able to avoid the issue up to now, but suddenly find your business has grown into the next bracket. Suddenly you have survival issues at stake. How do you grow and survive? I'll show you.

The BEE revolution is driving the values of most businesses down at a steady rate. In the face of this destruction of small business value, however, there are businesses being sold successfully at premium prices, either in part or in their entirety. Why does such a difference exist often between businesses of very similar characteristics, profitability, and prospects?
The answer lies in the way in which these businesses are prepared and presented for sale. And just as any product on a store shelf can be promoted better with some professional help, so can a business be well or badly prepared.

The fault lies in the hands of business owners, most of whom never consider selling their businesses until a few months before the event. In some instances business owners or their surviving spouses are forced to sell totally unprepared businesses in an environment of grief and total ignorance of the business itself because the late owner has failed to keep the business disposal preparation up to date.

All businesses should be in a constant state of readiness for sale. We live and work in an uncertain environment with new challenges being thrown our way constantly.