How much is my business worth on the open market?
- How will a Broker market my business?
- How much does Harcourts Grenadier charge for a successful sale?
- How much experience does Harcourts Grenadier have selling businesses similar to mine?
- Can the sale be kept Confidential?
- How long will it take to sell?
- When is the best time to sell?
- How much is my business worth?
To determine this you will need at least an hour long meeting with your Broker. Prior to this meeting, s/he will advise what information is needed to be brought to the meeting to determine its market value. The appraisal of the worth of your business will be indicative only at this stage, and will provide you with a price range that we would expect your business to sell for on the open market. This appraisal process is at no cost to you and is without obligation. Your Broker will utilise a combination of previous sales data, conventional valuation methodologies and experience to determine a realistic market value for your business. Business transactions are usually complex; there is often a requirement for your broker to establish a good rapport with your solicitor and accountant, the latter of which will often have an opinion as to the value of your business. You need to be aware that if the business is priced too high, the serious buyers will not even consider it, and if it is priced too low then you will not be rewarded accordingly.
How will the Broker market my business?
Harcourts Grenadier always has a pool of qualified registered buyers looking for businesses; often your business may fit the buying criteria of several of these buyers. The company produces a bi-monthly newsletter which includes our latest listings and is forwarded to over 650 solicitors and accountants throughout New Zealand. Other media such as newspapers, websites and direct marketing may all be used to provide the maximum exposure for your business.
How much does Harcourts Grenadier charge for a successful sale?
Your Broker will discuss the selling costs with you during your initial appraisal meeting. The selling fees charged relate to the overall value of your business and apply once a contract becomes unconditional.
How much experience does Harcourts Grenadier have selling businesses similar to mine?
Harcourts Grenadier has operated since 1995 with several of our brokers being involved within the industry for many years prior to joining the company. Collectively our brokers have a vast amount of industry experience. Whilst each business is different the sales process used to achieve a successful conclusion is usually similar.
What about confidentiality?
For most business owners, confidentiality is of paramount importance when they decide to exit and place their business on the market. Appointing an experienced business broker as an intermediary can minimise the chance of a breach of confidentiality. Your Broker will qualify buyers first then obtain a signed non–disclosure agreement before any information that may identify the business is released. While we can use our best endeavours to maintain confidentiality we can never guarantee to do so. As a general rule the longer a business is on the market the greater the likelihood that the word will leak out, which is another good reason to price the business realistically from the commencement of marketing.
How long will my business take to sell?
On average, businesses take three to four months to sell. If you are in a hurry to sell you may have to reduce the value of your business to do so, however having the business in a saleable state can often be more important than price. Your Broker will need to know all the ‘fish hooks’ in your business prior to going to the market. We can often mitigate potential problem areas, but we need to know about them. The due diligence process carried out by the purchaser’s advisors will find any problem areas if not already disclosed, and then buyers become very nervous as the trust is often lost.
When should I to go to the market?
Your Broker can advise the best time to go to the market. Having reviewed the information you have brought to the initial meeting, s/he can determine the best exit strategy for you so that you can achieve the maximum value from the sale of your business. The highest price is not necessarily the highest value, as there may be long payment terms attached to the offer, or a long possession date, or staff redundancy issues. Medium to larger sized businesses may need extensive presale preparation so careful planning is required. Your Broker can advise on these processes often in conjunction with your accountant and other key advisors. One of the most important steps in the sale of your business is the preparation of a professional Information memorandum. Your Broker will advise you as to the material and information they require to prepare this very important document. Be aware that prospective buyer’s advisors such as accountants and solicitors will undoubtedly sight this document so the preparation and contents is often critical to a successful sale.
What is the sale process?
Your Broker will advise the best ways for meeting with prospective buyers, and guide you as to how to answer questions. When a buyer wants to make an offer, the Broker will prepare an Agreement for Sale and Purchase. S/He will liaise with the purchaser, yourself and your advisors to reach agreement over the price and all terms and conditions of sale. This process can be complex and stressful if not handled professionally. The all important objective then is to ensure the conditions of sale are satisfied to achieve an unconditional contract. Finally, your Broker is available to give advice on the requirements at possession date and in the vendor’s period of assistance after possession.