How do I sell a business without using a broker?
A friend of mine wants to sell his small Japanese restaurant, however, he doesn't have the money to hire a business broker. How does one sell a business, and what is the process of selling a business?
- Financial Planner / Director at Phalanx Financial Services Pty Ltd
- 797 Plenty Rd
From my experience i think it varies a little from industry to industry but there are a few websites such as Seek Commercial which seem to cater for just about all types. There may also be specialised websites specifically to the food industry. The owner should also engage their accountant or other people they know in the food industry to determine what a fair and reasonable valuation method is for the restaurant to ensure they don't sell it for under its true worth.
If listing on websites is unaffordable then perhaps just having a chat with people they know run similar small businesses would be a good option. You never know who might be looking at trying to find exactly what they are trying to sell.
Yes in many cases it is not economically viable for a small business owner to engage the services of a Broker. This does not mean they cant achieve a successful sale and price selling it themselves.
There are many resources out there that are free or relatively inexpensive that can assist them in the process of selling their business.
Before advertising they will need to prepare a document on the business, which will tell potential buyers what their business is and what the current operations of the business looks like. This is the information they will need to provide to potential buyers after they express an interest in business.
By creating an information document (Lets call it a For Sale Memo) they will need to ask themselves: If you were buying your competitors business what questions would you ask and what information you would want to see from them? List these questions down and then fill them in with information on your business. If they get Sale Memo ready, they can send this to any potential inquirers, and it will answer any initial questions they may have about the business.
Now, where do you find the buyers? Since most of the businesses for sale are being offered through online advertising, some of the good websites to advertise your business for sale are business.domain.com.au, businessesforsale.com, bsale.com.au, business2sell.com.au.
Make sure your solicitor is involved to help you with the legal aspect of the transaction and also speak to your accountant to make sure your finances are in order, get a valuation done on the business to get an idea of your business value and sale price, and they also may have a potential purchaser, you never know.
Hope this helps answer your question a little further.