Raine and Horne Commercial

INSIGHTS SPRING 2018 | 34 SPECIALIST SERVICES | Business Sales The business sales market has reached its most challenging point in 25 years with bank lending a significant issue, according to Simon Winter, Principal, Raine Horne Business Sales . “The market is evolving faster than ever before,” notes Simon. “The banks are now so reluctant to fund business sales, and as such they have largely become irrelevant to the sale process. ”Business buyers have li le interest in an operation that is under-performing, run down or in decline. “Similarly, buyers will not consider a business that is technologically inefficient,” Simon says. “The profits need to be proven, and the addbacks will need to stand the scrutiny of due diligence.” Vendors continually underestimate the quality and capacity of buyers and believe they can cut corners, get lucky and sell their business for more than it’s worth, warns Simon. “These vendors are on the market a long time and have disappointing outcomes”. “The market respects businesses that have earned their stripes. The market is the great leveler and won’t be kind to a vendor that doesn’t deserve that right.” Vendors should be mindful that they don’t determine the market and the value of a business, explains Simon. “Vendors simply decide if they will accept the market verdict on price.” Buyers want quality, and they are prepared to pay for it, asserts Simon. “It doesn’t ma er what the business is, or does, or its size.” Business Sales Highlights Simon recommends that sellers must consider the following factors when considering a business sale: You sell what a business is worth today, not what it once was or might be in the future. The vendor didn’t invest in the potential. Therefore, potential is worth nothing. Take the time to get the business right and make the changes that are necessary. Change is easy if you start by thinking about what you can do be er. Don’t try and sell the business, instead present the business well by giving purchasers the information they need that empowers them to decide to buy. I have never sold a business to somebody who didn’t want to buy. Most important of all, get the price right.