Steps On Selling a Business

Selling a Business: Must-Follow Steps for Success

More often than not, sellers struggle to get their asking price because they price too high, don’t have the required information to help the buyer make an informed decision or don’t understand the process involved in selling a business.

Visit our Selling Process page for comprehensive information on the steps involved to sell a business at the right price in South Africa. To help you get started with the sale process, we provide an introduction to the steps involved.

Step 1 – Present the information

The buyer will want specific information to determine if the venture is a right fit for their budget, goals and interests. Your presentation of the venture is also the key to achieving the right price. Help the buyer to see the potential and provide the information required to support them in making a decision. This includes information about the financials, stock available, staff profile, profitability, marketing initiatives, lease agreement, licenses required, and business plan.

Step 2 – Choose a reputable and experienced broker

Selling a business without professional help can be difficult. How do you put the right price tag on it and what must you have in place to make the sale process easier? Professional brokers have the expertise to help you prepare, market and sell the venture at a market-related price. Only work with brokers who can present their EAAB Fidelity Fund Certificate. Our firm and all our brokers match this requirement. We have helped thousands of entrepreneurs throughout South Africa to sell their ventures.

Step 3 – Sign a contract with the relevant broker

You want the details of your relationship on paper. An agreement protects you and assures the broker that you’re serious about selling the business. It stipulates the responsibilities of the broker and sets out the commission payable upon sale. You can sign an exclusive or open mandate.

Step 4 – Determine the right price

We follow a three-fold approach to valuation, which has proven to be the best. With more than two decades of experience in valuations and setting the price for selling a business, we’re here to help you set the price based on aspects with the likes of extra earning potential, the return on investment for the buyer, and the payback time.

Step 5 – Marketing to potential buyers

Have an experienced broker create the marketing profile and promote the venture for sale in a discreet manner to the right buyers. Unlike marketing a house where you want maximum exposure, with your venture the confidentiality aspect is important. The broker uses the right channels, screens the buyers and handles the sale process discreetly and professionally.

Step 6 – Selling the business

The broker negotiates the sale price, handles the due diligence process, and manages the contract signing. The buyer raises finance, and the broker makes sure the sale process is completed.

Step 7 – Hand over to the new owner

The final step is the handover, with which the broker also helps.

What next?

Once you’re ready to take the first step, reach out for professional help in selling your business in South Africa.