You know your business better than anyone else and will almost always be the best person to conduct a viewing. The key to making a success of this is preparation.
From the moment you start marketing your business you should be on a “war footing”. It is worthwhile spending a couple of days sprucing up your premises – the whole property, not just the parts that your customers get to see. Consider the following:
* Tidy up ruthlessly, and keep things tidy. All those piles of stuff you no longer notice will just make a buyer think “it’s too small”.
* Redecorate: if your paintwork is looking tired then give it a new coat. This has the added bonus of forcing you to tidy up.
* Do all the little DIY jobs you have been putting off. Lots of little improvements will, taken together, make a real difference.
* Keep the staff bathroom clean.
* Look beyond your front and back door. It may not be your legal responsibility to keep the area around your premises clean and tidy but what impression does a sea of empty takeaway boxes give to a potential buyer?
When buyers view your business they will be assessing its financial potential. It is important to be able to present them with paperwork that provides a clear overview. Consider producing a summary just a few pages long that provides an honest picture of the business in an easily digestible form. This could include the following:
* Basic profit and loss figures for three years.
* Details of your most profitable sources/lines of business.
* A summary of assets and liabilities.
* A summary of your costs.
* Fixed costs, such as utilities and business rates.
* Leases, including rent, service charges and the division of responsibilities for maintenance between freeholder and leaseholder.
* Details of employees, including pay, benefits and the type of contract under which they are employed.
* A list of supplier agreements, including financial terms and termination clauses.
* A list of customer/client agreements, including financial terms and termination clauses.
Timing your viewing
What time of day will you show potential purchasers around? You need to be flexible, but there may be times when it just isn’t appropriate. For example, if you run a shop by yourself it is not a good idea to try to show a buyer around while you are open and trying to serve customers.
Similarly, if you have staff who do not yet know your business is for sale it might not be sensible to show a buyer around while they are on the premises.
In many cases it will be best to carry out viewings outside of normal working hours. If your trading hours are very long (a convenience store could be an example of this) then you will need someone to deal with customers so you can conduct the viewing and answer questions without interruptions.
If your business includes staff who will be transferring to a new owner, and you are conducting a viewing when they are on the premises, they should be presentable. If they know that the business is for sale then they should also be briefed and able to answer questions about their roles and the day-to-day functioning of the business in general.
Know your story
What you say to a buyer, and the way you respond to questions, can be the most important element of the viewing. Before the potential purchaser arrives, make sure you have strong, clear answers to the following questions:
* Why are you selling?
* What is the most profitable element of the business?
* What is the hardest thing about running this business?
* If you weren’t selling, what would you do to increase revenues or improve profits?
If the buyer doesn’t ask the last question then volunteer this information anyway. There may be something specific to your premises or clientele that offers potential for growth that another similar business cannot offer – if this is the case then your potential buyers need to know about it.
Most of all, be pleasant, open, straightforward and make it clear to potential buyers that you are a good person with whom to do business. Both of you want the transaction to be as smooth as possible so make sure they leave knowing that you are fair and plain-dealing – but not a pushover.
Chris Rowlands is the founder and managing director of Blacks Business Brokers, a national business transfer specialist based in Bury, Greater Manchester.