Selling a Business - Any ideas?

Savvy_Sue

What kind of biz is this, in terms of structure, ie is Dad a sole trader, or a ltd co?

I'm just wondering, if Dad can hold on a bit, whether it's worth getting a partner in and training them up?

Kayalana99

He's def not a ltd company but I think they changed it to a partnership for tax reasons with his wife.

I have suggested this and he basicly knows its an option but as I said it;

What if you hired someone to do your job for you and just paid them a wage?

Well I'm not sat by my computer all time and I am always off doing little jobs i.e delivering, BNI meetings, on phone to customers and thier wouldn't be enough to do for two people.

I think basicly he is not keen on taking the time to take a second person in because of the orignal training lol... as my point was once he had handed it over he could pay the employee £1000 and keep the rest but I think he wants to wash his hands of it even if it wasnt a full time job lol.

Brassedoff

It's not as unusual as you think. I have had dozens of business sales just like it. There is a prescribed list of things your Dad needs to do and over a period of time.

There is a value in the business, the key to it is also within the method of sale.

Contact a business sales company if you need to, expect to pay £750-£1000 up front, plus a percentage of the business. To cut down on time, make sure you have accounts ready.

I usually would say you have to keep the sale completely secret, even from the business landlord.

Pennywise

Kayalana99 wrote: »

If the person had the right skills, the files could be re created but this is the most time comsuming part of the job and they do need to be edited (so the person taking over the company needs these skills as I said before to run it)

So you're really cutting down the number of potential buyers, maybe to none. Why can't your Dad create the files himself and then he has something more tangible to sell.

He needs to be talking to some local business sales agents to get their view of his options, values, timescales, etc.

But, he does need to start putting the business in order. It will be worth a lot more, and more likely to sell, if he can organise it, preferably to be a "turn key" operation for someone to go in and run it from day one.

I've seen far too many businesses where there's not enough files/organisation, where everything is in the guy's head. They don't sell at a decent price, if at all.

It sounds like far too much is in his head, and that will dramatically reduce the sale price and likelihood of sale. If someone is willing to pay a decent amount for any business, they'll want it ready to trade from day 1 at full potential, not to have to recreate files, systemise it, organise it, etc. Local business sales agents will help him to decide what priorities need to be addressed to make it sellable at all, let alone at a decent price.

Mistral001

Business is all about trust. if the OP's father can find someone that he can trust to take over the business or in whom he can trust with his list of customers then he might get somewhere.

Sparhawke

I am not too sure but how about he stays on in an advisory/transitionary role while the new buyer gets the hang of things, that way he can slowly step back and then let the new owners ease into things.

Someone we all know has already done this, Martin Lewis is editor in chief of this website even though it was sold to moneysupermarket.com because he is the person people associate with the site.

If martin had just gone off to do something else entirely the site would still be as popular, at least a while. And dying in our beds, many years from now, would we be willin' to trade ALL the days, from this day to that, for one chance, just one chance, to come back here and tell our readers that they may take our thank buttons, but they'll never take OUR FORUM!!!

Kayalana99

Pennywise wrote: »

So you're really cutting down the number of potential buyers, maybe to none. Why can't your Dad create the files himself and then he has something more tangible to sell.

He needs to be talking to some local business sales agents to get their view of his options, values, timescales, etc.

But, he does need to start putting the business in order. It will be worth a lot more, and more likely to sell, if he can organise it, preferably to be a "turn key" operation for someone to go in and run it from day one.

I've seen far too many businesses where there's not enough files/organisation, where everything is in the guy's head. They don't sell at a decent price, if at all.

It sounds like far too much is in his head, and that will dramatically reduce the sale price and likelihood of sale. If someone is willing to pay a decent amount for any business, they'll want it ready to trade from day 1 at full potential, not to have to recreate files, systemise it, organise it, etc. Local business sales agents will help him to decide what priorities need to be addressed to make it sellable at all, let alone at a decent price.

I think you have majorly misinterpted what I meant, the 'files' already exist on my Dads computer and are unique to each customer, what I am saying is someone with right skills could re create them so although his customers could go elsewhere they would have to pay for them to be recreated whilst if they stayed put with the business (the person he sold it to) they would already have them files thier - thus a major plus for them not to change to someone else if the business was sold but to stay with it even under a dif owner.

Kayalana99

Sparhawke wrote: »

I am not too sure but how about he stays on in an advisory/transitionary role while the new buyer gets the hang of things, that way he can slowly step back and then let the new owners ease into things.

Someone we all know has already done this, Martin Lewis is editor in chief of this website even though it was sold to moneysupermarket.com because he is the person people associate with the site.

If martin had just gone off to do something else entirely the site would still be as popular, at least a while. And dying in our beds, many years from now, would we be willin' to trade ALL the days, from this day to that, for one chance, just one chance, to come back here and tell our readers that they may take our thank buttons, but they'll never take OUR FORUM!!!

I'm sure thats what he plans to do, but I think end day he just wants the money in his pocket and to wash his hands of the business now...I know he plans to spend some time abroad once its sold so this is probally a major reason for not wanting to employee anyone or have them pay installments (my suggestion as it would be perfect for someone in the trade wanting to become self employed but those kind of people don't have that kind of money to spend) Saying that I don't think his wife would want or knows right now he plans to move them abroad even if it is temporary I don't think she is going to agree somehow

paulwf

Kayalana99 wrote: »

I'm sure thats what he plans to do, but I think end day he just wants the money in his pocket and to wash his hands of the business now...I know he plans to spend some time abroad once its sold so this is probally a major reason for not wanting to employee anyone or have them pay installments (my suggestion as it would be perfect for someone in the trade wanting to become self employed but those kind of people don't have that kind of money to spend) Saying that I don't think his wife would want or knows right now he plans to move them abroad even if it is temporary I don't think she is going to agree somehow

Sounds like the main problem is that this should have all been planned 5 years ago. Perhaps he now needs to think of it like retiring from a job rather than having a business that owes him anything and just close once the customer book has been sold? I've seen other businesses like this, it has provided a living and doesn't owe you anything so perhaps best to move on.

I think plans need to be discussed openly...one person wants to sell the business for a decent amount of money and emigrate, perhaps the wife expects him to slowly wind down and pass the business on as a going concern over a longer timescale?

Brassedoff

So you come back to the method of disposal. To be honest, I am struggling with the cryptic method of the postings.

I assume he has a database of customers, but the database may not be in the conventional sense within a CRM. Is this correct?

Secondly, the business must have some assets that the seller has built up over the years? Is this correct?

Finally, is this business a conventional one with longevity or is it a business that due to the internet, a change of buying methods etc has not got a long future?

Without saying (as the forum is anonymous) where you are based, the type of business it is? I could for argument sake say "My friend has a business he wants to sell. The business is one that makes toy soldiers via tin mouldings" The customer base is one that is mature, but due to plastic soldiers coming on to the market in the 1970's is a dying art.

Or is it the case that the OP's father is "Sam the Plumber" and has a client bank, good name locally, but wants to get out of the trade and believes his business has some value?

The latter has not a lot of value apart from the name and phone number. I have advised on sales where the owner put a value on a business that really had no value at all. It was just their name in a local sense that had a known reputation. They are hard to value and for that reason often if they end up with a couple of thousand to pay for the name, phone number and website they are lucky.

It would help when it comes to being able to give advice for everyone who wants to help you.