Who receives the enquiries ? And what are my obligations ? (pending)

What level of enquiries should I expect ?

Confidentiality is absolutely critical. Can I be sure of this ? (pending)

How much info should I disclose in the public listing ? (pending)

What's to ROI (Return on Investment) and where do I enter it ? (pending)

I need to change price and details. How do I do that ? (pending)

None of the buyers have finance ? What can I do about this ? (pending)

I think I've sold the business. What's next ?

It's all over. Done and sold! I'm paid, but what do I pay Biz.for.Sale ?

 

Regarding the Commission Agreement.......     Is this some type of Sole or Exclusive Mandate ?

Not at all.! You should rather view this as an interactive form of advertising the sale of your business. The real differences between regular advertising and Biz.for.Sale advertising is that we provide a secure and anonymous way for the prospective buyer to contact you directly. And instead of you having advertising fees to pay; if there's no sale via our website then there's no cost to you. But if you do sell through the website, then the commission liability is due and payable.

Business brokers and other agents make use of this service as they consider it a cost effective method of national (and international) advertising which provides potential buyers that they may not be able to reach. The old formulas that suggested you advertise locally for the most likely buyers do not necessarily apply today. Many businesses, for example, are sold to South Africans returning from abroad - and the negotiations commence via this website.

Remember that, in terms of the Commission Agreement, you are only liable for the commission payment if a sale is concluded with a party that discovered you via the Biz.for.Sale website listing or made contact with you through the website.

 

What level of enquiries will I receive...     Do I need to make preparations to handle these ?

Some businesses will get an enquiry a day, and they may be largely frivolous; while another may receive only one a month, but that may result in a near sale each time. Frequency and quality will vary depending on the listing. We can't tell - but we do see that sellers who give out a generous amount of information receive a higher level of enquiries and they report back to us that their quality of enquiry improves dramatically with more information tendered in the listing. It stands to reason - the level of info will deter the person who then realises the business is not for him/her, and attracts the buyer who perceives the seller to be making a fuller disclosure.

Businesses priced between R100 000 and R800 000 do receive a higher level of enquiries, presumably because they are more affordable.

We recommend that you prepare an "info pack" for people who make enquiries which contains extra information that you are prepared to disclose, but don't want to make available to unidentified persons. ie. abbreviated financials, market prospects, reasons for selling, photographs, etc. You may want the prospective buyer to complete a "Non-Disclosure Agreement" before sending the information. If they are just kicking tyres this will dissuade them from replying, and a competitor or other sneaky type trying to get details of your operations would be similarly dissuaded when facedwith that document.

Having a "ready to send" Info Pack also makes it easy to respond quickly while the buyer is still keen and remembers actually contacting you. Mailing off to the buyer a week or two later is not a good idea.!

 

I think I've sold the business...   What comes next ?

First thing - let us know. If you're sure that the deal is proceeding, and maybe a sizeable deposit has been paid, then perhaps the listing should be removed. If you don't do that then enquiries will still come in and you'll be responding to people who will ask why you didn't terminate it. If you don't respond to them then they complain to us about no response. We'd all like to avoid those calls.

The other approach is for us to place a prominent note in the short description to the effect that a potential sale is in negotiation. Interested parties are invited to record their enquiries and will be contacted when the deal has either reached an irrevocable stage or has been cancelled. Experience has shown that most listings attract a much higher level of enquiries when such a note is appended. Akin to chumming the water to put fish on the bite, the statement tends to make potential buyers feel that they've missed a deal. Someone else has seen the value, assessed the purchase and made an offer ahead of them. Typically this is when full price cash offers suddenly appear. Your initial deal might well collapse (many do at the due diligence or cash payment stage) and it is comforting to know there are one or two backup offers behind that.

So we've amended the listing, and you have your offer. The next step is to decide if you need some professional help. Many smaller business sales, say of R200 000 or less, are often managed by the seller's business broker with template sales agreements. Perhaps the potential losses of a soured sale are limited by the size of the deal which makes an unassisted purchase less risky to the parties. While this threshhold will vary, at some sale price point it will be advisable for the seller to enlist the help of a lawyer or accountant. Accountants are normally more adept at providing the due diligence service and lawyers would provide better contractual services. You only have to read the Goodricke's article, Matters to Consider when Buying or Selling a Business to realise there's plenty that can go wrong.

Our advice - Call in the professionals and spend a little to make sure your deal has legs and will carry through. Usually the seller would have made a written offer to purchase and that would be the primary document for your lawyer to check. Most legal practices have a partner who would have business sales as his expertise area and they are adept at drafting sales agreements and guiding you through the process.

 

It's all over. Done and sold! Deal closed and the cheque has cleared...     I'm paid, but what do I pay Biz.for.Sale ?

This is the easy bit, and the bit we like.   :-)   All you need do is let us know and confirm the actual selling price. We will check your contract to confirm the commission rate and then raise an invoice which will also detail our banking details and send that off to you. End of the journey for us.