Getting enquires in the same week where one of the parties “needs to sell their on-line business within the month” and the other wishes to have a meeting to discuss the process of selling their business with greater understanding around best timings based on how prepared the business is to sell.
Inevitably the former who is after a quick sale is after the proverbial “Rabbit out of a Hat” scenario where I have a group of ready and willing buyers. Nothing wrong with that intention, but it is totally dependant on how well the business is prepared for sale and in what state the accounting and records/reports are in.
From experience, the more urgent the requirement for the sale, the less prepared the business is for sale. There are many circumstances around the need for to sell, I have gone over these in previous columns... typically there’s been a health scare, or the owner has run out of either capital and or inclination to take it further, or for whatever reasons.
In this particular instance, it was impossible for the accounting of the business to be itemised as all funds had been put under a personal name... not easy for a buyer to trust what they needed to know to make an informed decision around the profitability of the business, let alone seeking the advice of their accountant.
Enter the slow methodical process… when reviewing for another company it’s systems and procedures, it was deemed preferable for the implementation of a bar-coding system for stock management. This enabled a truer indication as to what stock was out at any one time and made the accounting for same a lot more effective and accurate without the need for continual visual checks and estimations.
Whilst it took a couple of months to install and test, it created higher degrees of checks and balances for the new owner along with greater confidence moving forward into a contractual sale of the business.
Buyers aren’t necessarily in a hurry to invest in your business, they are very keen to find great opportunities no issues there, but this needs to be followed by systematic processes to ensure they are purchasing with confidence. Unanswered questions create doubt, and doubt puts a halt on progress until believable answers or comprehension around a situation are given... or it stops altogether.
Moral of the story, presenting a well-prepared business for sale may take longer to achieve, but inevitably has a higher chance of making it through the due diligence stage and eventual sale, than not.