25/09/2008 by info.

Businesses don’t always sell; here are the 5 main reasons why:

1. Poor Market Conditions

An economic slowdown will often have an effect of putting a lot of businesses for sale simultaneously. Credit is also less available and this generally will affect both buyers and sellers of businesses. If anything, it can represent opportunity for those buyers that have plenty of cash. For sellers, it presents a real challenge, as there is no easy remedy.

2. Lack of Exposure

Lack of exposure is usually the primary reason that businesses fail to sell. Many traditional business owners continue to rely on friends and business connections to sell their business. Whilst, this way does in some cases produce a successful outcome, the price obtained can be below the market price. It can take up to six months to sell a business and it is very expensive to place advertisements on a weekly or daily basis with costs potentially running into the thousands.

Most people would not sell their house this way so selling a business should also be about attracting the most potential buyers and that requires an increase in exposure.

Business agents are often most effective way of reaching your target market.

3. Failing to Provide Information to Potential Buyers

Withholding too much information on a business can also prevent a sale. Some sellers of business have a concern that competitors will find out information and will not provide much in the way to potential buyers to act upon. This can be quite counter-productive especially if it means that the seller loses nine out of ten of prospective buyers because there is inadequate information.

They may believe that in tandem with other reasons here that the reason why information has been withheld is because the seller is hiding something.

4. Lack of Preparation for a Sale

In many cases, buyers will not proceed with a sale generally because sellers were not actually prepared to sell their business. Systems, staffing, processes and financial records need to be in a state where a new owner can easily take over the running of the business. Lack of preparation can kill a deal.

Business owners simply decide they want to sell and either advertises the business or contact an agent to sell without thinking about the buyers needs.

5. Price is Incorrect

Businesses can be placed on the market at too high a price, and therefore will be unsold for years or be placed on the market at too low a price, so that buyers think that there must be something wrong with the business.

If you cannot sell your business, reducing price may actually be the wrong thing to do. The reason why you may not be able to sell your business may be due to the other reasons mentioned above.

So if you are looking to sell your business don’t think that it is only the market that is important. There are several key mistakes to avoid that will greatly enhance your chance of success.

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16/09/2008 by info.

On 1 October 2008, anyone wishing to sell a business in the UK will have to provide an Energy Performance Certificate (EPC) prior to an exchange of contracts.

Although this does not need to be provided until the exchange of contracts we recommend that the EPC should be commissioned as soon as the business is placed on the market.

The reason being that it reduces the possibility of the sale collapsing due to a poor rating, or the buyer wanting to renegotiate the deal.

If the premises is let on a leasehold basis either the freeholder or leasehold would have to provide this report dependant on who sold first.

This will add £500 plus on to the cost of selling a business in the short term but the good news is that the EPC will last for 10 years. What this will mean is that anyone selling that same business within that period will not have that cost.

The idea is that the buyer can see how efficient the premises is and what their likely energy bills will be. The idea is that the higher the rating the more the premises is worth.

In the UK residential property has been required to provide an EPC, and surveys have indicated that buyers would be willing to pay £3 - £4,000 more for a property with a good rating.

It may however be worthwhile, if your energy bills are high in getting an EPC assessment from an assessor as it would reduce your energy bills and increase your profits. For most small businesses a £1 deduction in their costs increases the value of the business by at least £2. So this investment should be recouped many times over.

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