What to Do Before Selling a Business in South Africa
Selling a business entails more than just putting an ad online and responding to interested buyers. Indeed, before selling a business, you need to make it presentable and improve the value proposition. Just as it is important to prepare your home for staging, you need to prepare the documents, sales, personnel, and premises to create the right first impression.
Fortunately, when you make use of experienced brokers, you gain the benefits of:
· Guidance regarding relevant documentation.
· A proper and legally valid sales agreement.
· Assistance throughout the selling of the business.
· Pre-screening of potential buyers to ensure that the parties that contact you qualify and are serious.
· Advice on improving the value proposition.
· Assistance in dealing with franchisor requirements where relevant.
· Maximum marketing exposure to relevant buyers.
· Assistance in realising the best possible price for your particular business.
The first thing to do is thus to get professional help when selling a business. In this way, you can avoid costly pitfalls, reduce the costs involved in selling a business, and position your business for the best possible price. To get you started, we share a few pointers to help you prepare:
Prepare the business to create visual appeal. Remove clutter from the office, workshop, loading yard, storage rooms, front of house, kitchen, bathrooms, etc. Wash the windows, and repair the locks and faulty equipment. Have equipment serviced and if needed, buy new uniforms for staff members. Make sure that your workers are presentable, and that all marketing and point-of-sale materials are neat. Remove old posters and décor. You want your business to appear as successful as it is or potentially can be. Make sure that the files are organised and neat.
Before selling a business, it is essential to streamline operations. This will help to improve profitability and minimise the risk of bottlenecks. You want to create the best possible cash flow, which is possible if you have streamlined financial and operational functions. Where needed, automate repetitive tasks and revisit your systems, training, inventory control, time management, procedures, and customer service. Where needed, let workers attend refresher courses, create disciplinary policy manuals, and set up a quality control system and record-keeping procedures. With such in place, you can add value to the business.
The buyer will want to see the books. If you have not kept books, then start immediately. Get your taxes in order and have an auditor prepare financial statements. Also, reduce overheads where possible to ensure higher profitability.
Don’t Overlook Assets
Your social media pages, website, email campaigns, newspaper ads, community ads, posters, television or radio ads, promotions, and sponsorships are also value-adding marketing features. Optimise your website for good search engine placement, post regularly on your social media pages, invest to get more people on the online platforms, and develop brand awareness.
Ask your broker for guidance on the required documentation. Make sure that all the licences and permits are up to date. Have copies ready for inspection. Obtain bank statements and have the company or ownership information ready. Take stock and create a list of assets included in the sale of the business. Also, update your supplier and customer files.
Call on our brokering team for professional assistance in selling a business. We will assist you with the marketing and conclusion of the sales agreement.