(How to avoid the expense and unnecessary contractual arrangements with business brokers who do not understand the merits of specialist food and drink businesses)
Selling your busines is either like fishing for compliments because you want someone to like it as much as you do (even though you want it sold) or it’s like walking around with no trousers on because everything is on view.
Some people say you should never start a business if you do not know how you will stop/sell/transfer it. However, there are many reasons to start a business and very few people know how it will end.
At the moment there are many food and drink companies who want to sell. They have had enough. They have worked for years building and developing their business only to be hit with the latest crisis that potentially has hit sales or made operations more difficult and costly. If it’s the money you want then don’t be in a hurry. If its to stop the headaches, then don’t be in a hurry. If its personal, family, health type reasons then don’t be in a hurry and perhaps see if you can get a trade sale?
You can sell a ‘going-concern’ as in it’s a legal entity that is trading profitably and sustainably. That means all the liabilities such as invoices, claims, brands, assets used to make product etc. it all goes as a legal entity. This is why people do ‘due diligence’ as in, make sure you know what is in the sale.
Or, you can do what some people call a trade sale which is basically as if the busines ceased trading and the assets are sold off. No legal liabilities transfer and once complete its probably worth winding up the old company. You might be really clever and license-out the brand and recipes and sit back and collect the fees. Hey, we can all dream.
Despite what some business transfer brokers will claim it takes longer, costs money and can fall over as a process at any moment.
Reckon on at least 6 months if you have a hot offer to 2 years if you have to go out to find a buyer. This assumes you have the business in a fit state to sell.
You! Seriously, there is no one who can sell your business better than you. It isn’t as hard as it looks. You should get a solicitor to draft agreements. You will need the accountant to advise especially on tax etc.
So many businesses put themselves up for sale and think that’s it, take their eye off the ball and start spending the proceeds in their heads before anyone has even looked at buying. You are selling the future revenue streams and upside, not a mediocre excuse as to why the last two years are a bit lack-lustre. The business needs to be pumped and ready for future profit. So, get back to work and stop flicking through yacht brochures.
Often food and drink businesses carry the owners name or is still pretty much intrinsically linked to you, emotionally etc. You might have built it from scratch or inherited it from the family so it’s a big deal. Let go. When its gone its gone.
Mypackme.com has now the facility to allow you to test the market by matching those people who might like to sell their business with those people seeking a business. It costs nothing to register and can be as discreet as you like.
It might be the quickest and easiest way of increasing profitability. If you already produce, distribute or retail complimentary products or services then there might be an immediate benefit without increasing your cost base. It is never quite that simple but.. Or there could be the issue of potential competition either removed through purchase or offering a better position in a market.
Or you might be a investment business such as a pension manager etc. How to deliver a constant stream of revenue that is relatively low-risk and able to keep pace with the market. Buying a business might be a good way of getting a return when interest rates are so low as to not offer a sensible return for your capital?
Buy or sell; these transactions have the hidden cost of finding the right party with which to trade. Hopefully trying out the prospect of a sale discreetly might be a lot less risky through Mypackme.com