Almost every founder of a small or medium-sized enterprise will want to sell their business at some point. Motives might range from retirement, illness or simply a desire to do something different.
Getting the best price is essential as is ensuring that all legal and financial details are in order. A seller will have to carry out due diligence in the same way that a buyer will. However, in some cases the costs with selling a small business can almost outweigh the benefits. Finding the most cost-effective and efficient way to sell your business is essential.
Now, a new website offers an alternative to the traditional methods that can include brokers and accountants. Bizdaq allows people to buy and sell their small and medium-sized businesses – everything from cafes to property management firms – via its online platform. It aims to take less time than traditional methods and to save owners thousands of pounds in commission fees.
Traditionally business owners going through a broker or agent to sell their company could pay a commission fee of up to 15 per cent on the final sale and tie owners down to a 12-month contract.
Based in Leeds, Bizdaq offers its users a monthly subscription service, and owners can sell their business for a fee as little as £500. It was set up by Sean Mallon, an experienced business broker who believes that his service offers SME owners a faster, more affordable platform to buy and sell companies.
Mallon’s research showed that many business owners felt they could be successful in selling if they simply had the correct tools to do it. “We also believe that the process of buying and selling needed to be simplified to allow more people to realise their dream of running their own business,” said Mallon who recently raised seed capital of £1m for the company. A national marketing campaign will start next month.
Already, though, a wide range of SMEs have been sold through Bizdaq. “The variety of businesses being sold through Bizdaq is incredible – these range from cafes to property management firms, social media companies through to a guesthouse in Merseyside,” added Mallon. “It’s apparent that every business has a value, and that selling these can be easily done when they are given the prominence.”
He explained: “We have recently helped a small stationery supplier sell his goodwill [the established reputation of his business], including his client base, during our beta testing. He was looking to sell after three years of ownership, and due to the low value of his business he wanted to maximise the return on sale – he received over 120 per cent of this by selling through Bizdaq.”
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Another business that was sold through Bizdaq is Total Time Print. Based in Brighton, this small printing business was run by two business partners who had built up a successful business targeting the B2B market within Brighton and East Sussex. With over 500 local business accounts the company had substantial printing equipment included within the sale as well as the good will of the customer base. The business partners were looking to go separate ways and were looking for a quick sale.
Bizdaq sent out an automated email shot to its registered buyers who were interested in relevant businesses. The buyer was the owner of another printing business in Essex. He acquired the good will of the business and serviced the loyal customer base from their printing premises in Chelmsford. The price was £225,000.
“When you’re looking to sell your business it’s important to be realistic in your expectations,” urged Sean Mallon. “It takes time to sell a business, so don’t expect it to happen tomorrow. However, you’ll be far more successful if you plan ahead and make sure your basic book-keeping and business information is in order.”
He advised sellers to be clear about why they are selling. “Don’t be afraid to say ‘I just fancy a change’. Buyers can sense if you’re not being honest. Be flexible and prompt in providing them anything they need to make a decision.”
Bizdaq aims to guide sellers on a step by step journey. It also has an in-depth knowledge and community section where sellers can get any information they need on achieving a successful sale. After all, knowledge of the business as well as trust and transparency are key to a successful sale.
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