Get your documentation ready
Leasing Details
If you are renting the premises your business is in, then get a copy of your lease. The buyer will want to see these arrangements. Often a business has plenty of options (i.e. 5×5 years). Even if you have a month by month lease you will still have a Lease Agreement. No matter what type: put yourself in a buyer’s shoes, you would want to know that when buying your business, there is a secure lease is, or can be put in place. If you are fortunate enough to own the premises, then consider whether or not you are selling the premises with the business. Alternatively, you may want to keep the premises and just sell the business and lease the premises to the new owner.
Profit and Loss
No matter what the financials are, a prospective new buyer will want to see them. Usually the last 2 or 3 years of trading are acceptable and depending on the time of the year you are selling, it is satisfactory to only have up to the previous financial year. Most small businesses have their financials up-to-date or just over 12 months old. Your financials should not be shown until you have a genuine interested buyer. The buyers are initially interested in what they see and what you are telling them, like the benefits and the future opportunities.
Is it hard to sell my marine business without a broker?
No it’s not. Remember, you have owned and operated your business for a while now and you know your business inside and out. Certainly, better than any Broker would. There would be very few Brokers that specialise in Marine Businesses. If you have done all of the above, then you are well on your way and ready to market your marine business for sale. Until you start advertising the sale of your business, then you won’t know who is interested. Getting the right advertising exposure to attract the right buyers to buy your marine business is very important. A broker would use major sites to list your business for sale, but you can too. The main difference is that you have control over who is looking at buying your business and when you sell, you won’t be paying any commissions whatsoever. The benefits of selling privately far out way selling those through a broker. Of course, Business Brokers may tell you differently. You have worked a long time in your business and brokers often charge very hefty commissions, especially in a specialist area like Marine Businesses. Often commissions can exceed 10%. 10%!!!! of the whole business sale price. That’s 10% of your equipment, 10% of your good name and 10% out of your pocket. You may have already purchased your business previously, or even paid for a new set-up. So be well informed how much it is really costing you to sell through a broker.
Example: In 2015 you purchased your business for $280,000 including stock. During the running of your business you have replaced equipment items (value $70,000). You have also increased the revenue. Today your business may be worth $460,000 including stock. So if a broker is charging 10%, then you will need to pay them $46,000 + advertising costs (lets round it to $46k). Your profit from the sale is the sale price ($460k) less your original set-up and extra expenditure ($350k) – profit is $100k. So, $46,000 to your broker is 46%! YOU are the one who deserves this, not the broker.
Be aware 10% does not mean 10% it is more likely 40-50%
