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SELLING A BUSINESS – the process
• What is my business worth?
Determining a fair market value of your business is an involved procedure, which takes many variables into account.
Consideration must be given to your businesses strengths, assets, historical financial performance and projections, along with many intangibles. Purchase price comparisons must be made with similar businesses that have sold within your industry.
Over pricing as well as under pricing must be avoided in order to ensure reaching the correct buyers and market place as well as minimising the selling period.
• Sales request form
We will meet with you and visit your premises as we need to determine your objectives and collect all pertinent information.
For this purpose, we request that a sales request form be completed and returned by email or fax. (See form below). This creates no obligation on you.
• Client interview
 Correct preparation is crucial.
A primary requisite would therefore be the presentation of up to date financials.
The business must be properly packaged with all applicable records and facts organised and documented. This ensures presentation in its most favourable light, while providing the potential buyer with a concrete document to follow and review. Intangibles include reputation, market niche, operation and production systems, customer loyalty, trained and skilled employees, and future potential.
• Screening potential buyers
This involves fielding all phone and email responses, answering initial questions and ascertaining their interest level, management skills and ability to meet the financial requirements of the potential sale as well as getting signed confidentiality undertakings.
• Presentation and review
Provide the potential buyer with all relevant information.
• Negotiations and screening
Negotiations between the buyer and seller can sometimes be difficult.
Cape Business Bureau will resolve all relevant issues as they arise and control all aspects of the purchase process until resolution is reached.
• Offer to Purchase
Cape Business Bureau prepares the offer document, has it signed by the buyer and presents it to the Seller and discuss any questions regarding the offer. Once accepted, there are many matters to attend to.
A checklist is drawn to assist both the buyer and the seller.
• Suspensive Conditions & Due Diligence
The offer is usually contingent on the buyer verifying the accuracy of the Seller’s financial and operational representations.
The buyer begins the process of due diligence and inspects detailed business information.
This process also involves managing and settling all contingencies.
Other suspensive conditions will involve obtaining the landlords approval for the buyer to take over the lease, and possibly a loan and, if applicable, the franchisor’s approval. A time period is stipulated and monitored.
• Transition period
This typically involves a period of cooperation in which you will assist the buyer is effectuating a ‘seamless’ transition.
From the checklist matters such as transferring of key relationships and proprietary information needed to successfully operate the business are dealt with. This is a very important piece of the entire process and the time required varies from business to business.
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