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Selling Specific Businesses

We adopt a different strategy for each business type

Selling a Cleaning Business

Cleaning businesses are very saleable. Commercial cleaning is more in demand than domestic cleaning as the work is usually ongoing and hence more reliable. Also rates for commercial cleaning are better than for domestic cleaning.

Cleaning businesses are generally sold in one of two ways. Either to an individual wanting to enter the marketplace, or, a competitor wishing to expand their existing portfolio so that they can leverage their resources. Your business is only saleable if you can show a history of continual profits, your clients are happy with the service you provide, and you are charging market rates.

Selling a Hire Business

Hire Businesses are in high demand, although you will find many of them have been swallowed up by the bigger players. Value can be attached to the quality and state of the equipment. Many players got out of this market because of the need to have large amounts of capital tied up in equipment. The traditional way to value these businesses was a dollar paid for each dollar of turnover depending on the state of the equipment.

If the equipment was old a buyer would often tell the vendor if they sold the equipment themselves the buyer would give them a small amount for their customer list, the phone number and a notification to the customers that the buyer had taken over

Selling a Personal Training Studio

Improve your business and its profitability by putting in systems and procedures to take full advantage of all that you have to offer. The value of a personal training studio is based on net profit, future receivables, staff, size, the lease, potential, assets ( both tangible and intangible), location, members and history of profitability. You will be judged on your ability to keep clients, as well as keep trainers happy. If you can attract good trainers, your future and business value is assured.

Also these days you need to diversify the delivery of your services. You need to offer weight loss, exercise physiology, boot camp, single and group classes and other fitness services. This not only attracts customers but spreads your service offering and reduces risk in the business.

Selling a Manufacturing Business

Manufacturing businesses are in high demand from business buyers, both from Australia and from overseas. It helps if the buyer has some experience in your type of business before coming to your business. This applies especially to buyers from overseas.

With manufacturing, a buyer always has an eye towards the future. Will the industry be disrupted by new technology or threats posed by cheaper imports. Manufacturing does well where you have a competitive advantage and there is demand for your product both here and overseas. Equipment needs to be up-to-date and well-maintained. Any shortfall here will mean a corresponding reduction in purchase price.

Selling a Distribution Business

Distribution businesses are highly valuable and highly sought after. This is because a distributor is generally expected to have ongoing cash flows as long as the relationships with their retailer and the supplier are maintained.

It is generally perceived these relationships will continue as long as the distributor is doing a good job. Many try to differentiate their brands on price in the hope that lower prices (and margins) will lead to a higher volume of sales. This approach is not an effective strategy for long-term growth.

Selling an Accommodation and Tourism Business

Accommodation and Tourism businesses are a different animal to the one that was around ten years ago or so. They rely so much on the internet and have been the most exposed to innovation and technology.

All the more reason you need to increase turnover by working with distributors (retail travel agents, online travel agents ,in-bound tour operators, wholesalers), to reach the right consumers that will deliver sales for your business.

Selling a Mortgage Broking Business

Finance businesses are very attractive because they build up an income trail which is saleable because it is transferable. These businesses are often valued on a multiple of their trailing come although you can also value them on the profit. Buyers see the trail income is much more reliable than the upfront or commission income. In our experience,  the market has tended to accept the trail income method of business valuation as the only way.

We however, have been able to sell businesses based on business profit and not just topline trail income. Click on the Learn More button to find out ways you can boost value and improve chances of sale of your mortgage broking business.

Selling a Florist Business

Selling a florist can be quite tricky. The florist is an artist and the buyer wants to be sure that they can replace the florist. One way of overcoming is this is trying to add extra income streams outside the traditional floral designing area.

The more your sales rely on standard lines rather than design products, the more transferable your business is. For example, sell more bunches, sell accessories and gift lines to add to your sales. There are ways of reducing your risk when you either are selling or buying a florist. Click on the Learn More button to find out how to prepare your florist for sale.

Selling a Hair Salon Business

Hair Salon is a type of business where the goodwill of the business can be heavily associated with the current owner. To sell the business for more than asset value, the owner of this business has to establish to the satisfaction of the buyer that there is goodwill that is going to come across with the sale.

Condition of the premises, rent, proximity to an attractive demographic, available parking and state of the staff roster are all factors that can add value to the business. It helps if you have other services provided in the salon. This will attract other types of customers who might end up buying from the salon.  Also they might help to pay the rent by paying a weekly amount to work from there. A nail artist will only take up a little room, but could pay well to be there and have the chance to deal with your clients.

Selling a Wholesale Business

A wholesale business relies on the strength of the industry it is selling into.  For example, if it is selling in retail, it depends on the strength of the retail industry for its future success. These days you need to be careful that people aren’t going to go direct and hence take the wholesaler out of the loop.

The wholesaler must remain relevant and continue to provide good value for it to be viable.  As a wholesaler you manage the relationship between supplier and end user. You want to make sure you don’t over-extend your financial position by allowing terms of trade that are to your disadvantage. The more capital your business needs to operate, the less valuable your business will be.

Selling a Vending Machine Business

A vending machine business is highly sought after, because it is perceived as a business that needs little attention from the owner. That can be true, but you have to be very careful that that doesn’t lead to neglect. You need to pay attention to maintenance and upgrading of machines as necessary.

Also, placement of machines is key, as you don’t want to be doing a run all around the town to check on four machines. You need a compact run where a lot of machines are either in one building/complex or close proximity to each other. Technology is also of paramount importance here. You need modern machines that can be easily fixed by you, the owner.

Selling Service Businesses Generally

BCI specialises in selling service businesses. We have no difficulty in selling businesses that are just about 100% goodwill. In a service business, you need to be sure that your database of clients is transferable to a new buyer.

You need to build infrastructure around the service so that when you do come to sell the business, there is this entity that exists outside the owners. It’s the transferability and maintainability of the income stream that you must maintain in order to give a buyer confidence about future cash flows.  Click on the Learn More button to find out how to prepare your service business for sale.

Selling an Export/Import Business

An import/export business relies on Economies of scale. It is only viable to import or export as long as the terms of trade are favourable. You will need to be sure that you can fund your import business.

Exporters are always watching the foreign exchange rates as that is where its greatest threat lies.

Selling a Cafe Business

Cafes are a little easier to sell than restaurants. More buyers believe they can run a cafe without having to employ expensive chefs and support staff. And coffee is all the rage at the moment. The shorter the hours your cafe is open the more valuable it is. If you are running a cafe with a view to one day selling it, you must remember that there will always be change and you must stay in front of change.

You need to create the change, to create the innovation, to stay ahead of the pack. Click the Learn More button to find out how to prepare your cafe for sale.

Selling a Restaurant Business

This type of business can be a challenge to sell because the buyer doesn’t necessarily want everything that you’ve set up. Often the business is worth more to you the seller that it is to a buyer. You need to make sure you have a good staff roster and ensure that they are happy. Choose good equipment.

The best thing you can do is choose the right location with reference to the demographic and also things like parking and ease of access.

Selling an Online Business

An online business needs to have good analytics and needs to have a good ongoing income stream. The owner usually is not important as there is hardly any client-facing interactions. Make sure Google can see you.

Start talking to your audience and make sure your business is in regular communication with your customers using a suitable email marketing strategy to inform them of current happenings within the business and any specials.  Set up a blog and keep it up to date regularly.

Selling a Real Estate Business

Real estate businesses have at least two separate income streams. One comes from sales of properties, and the other comes from ongoing commissions payable on collecting rent and maintaining properties.

The ongoing income is far more valuable than the income coming from the sales side. Often a real estate business is valued on a rule of thumb basis, on the ongoing income only. A good sales office however should be able to realise considerable value, depending on its systems, history, location, demographic and current infrastructure.

Selling an Accounting Business

If you are selling an accounting business, the main question for your buyer is going to be “How transferable is the client base?”. Systems are also important. Your best buyer often comes from within the firm. Choose employees who might one day mature into a buyer for your business.

The type of client that the business has will also determine value for an exiting owner. The more substantial the clients in the client base, the greater value the business will have.

Selling a Convenience Store Business

Convenience stores are in heavy demand. Businesses selling food are seen to be safe for the future. The convenience store can easily be managed by staff that need very little training or expertise.

Location is king for this type of business. The convenience store needs to be located in a high-density neighbourhood and low rent is the key, as this type of business is usually selling low margin products.

Selling a Newsagency Business

Newsagencies have changed over the past twenty years. With magazine and paper sales down, newsagents have to offer high levels of customer service, as well as introduce new retail lines to sell.

The delivery side of the business is still important and valuable.

Selling a Laundry Business

Laundromats and coin-operated laundromats are popular choices among business buyers as they often have minimal payroll expenses and can be successfully run as an absentee-run business. For this to happen, it has to be profitable enough to employ staff.  Additionally, laundromats usually have predictable sales and cash flow making it an easy business to run. 

So when should you sell? Ideally, when sales are steady and your equipment is in good condition.  The condition of your equipment is the biggest factor in the due diligence process of selling this type of business.

Selling a Franchise Business

With a franchise business, your business should be worth a little more than a non-franchise business that makes the same money, because of a number of factors. Those factors are the brand, the systems and the inherent transferability of the business.

When selling a franchise business, you are not just selling your business, you are transferring a relationship with the franchisor. If you have a good franchisor, then you are lucky. If not, you need to keep working on your business to make it as attractive as possible to a buyer.

Selling an Insurance Brokerage Business

This type of business is similar to finance brokerage. These businesses are attractive because of the ongoing income trail transferable with the business.

While the commissions payable to the business can be attractive, it is the ongoing income stream that makes the business valuable.

Selling a Home Based Business

Home-based businesses can be highly sought after and sold for a lot of money. BCI recently sold a business for $800,000 that was operated out of someone’s garage. Many businesses have started from home and ended up flourishing as home-based business. You should separate your business from your home life and structure time and staff for your business.

Learn the basic skills of running an office, including how to troubleshoot some rudimentary technical problems.

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