Faq's
- What is my business worth?
There is no set way of valuing a business. There are many factors to take in to consideration. What type of business you have, turnover and gross profit, whether your premises are leasehold or freehold. Our experienced consultants can accurately evaluate your business to suggest an appropriate marketing price. However, the true value of your business is whatever a purchaser is willing to pay. Location, business type and fixtures and fittings can all add a premium.
- How long will it take to sell my business?
There is no simple answer. Many factors come in to play, such as the popularity of certain business types, the economic climate - with people often looking for the security of owning their own business, the number of similar businesses on the market, etc. However, the process can be speeded up by choosing a proactive agent, who will put an active marketing strategy in place to get your business's details seen by the most appropriate interested parties.
- How will Preferred Commercial market my business?
Preferred Commercial are experienced in marketing all types and sizes of businesses. Each business is individually appraised and an appropriate marketing strategy planned. We use a variety of media including, national publications, trade journals and, of course, the Internet. Preferred Commercial have a vast up-to-date database of individuals, corporations and acquisition directors whose requirements will be computer matched against your business. Each match will be contacted with your business's details. Our experienced sales team will research potential purchasers and liaise with you on a regular basis.
- What is SAV?
SAV simply stands for stock at valuation. Generally this is not included in the asking price of a business, simply because stock levels and values may vary from month to month. It is standard practice to have the stock independently valued upon completion of the sale. It is worth bearing in mind to get an estimate from the vendor of the average value of stock held.
- What are the advantages to buying an existing business?
Buying an established business has many benefits as opposed to starting a business yourself from scratch. An established business will have all the necessary systems in place to enable you to trade from day one. Usually there will be an existing customer base and a reliable income. Existing staff will have a vast knowledge base on which you can draw. There will be a network of useful contacts and suppliers in place. Most, if not all of the teething problems will have been resolved. A demand for the product or service will already have been demonstrated
- What sort of questions should I ask the vendor when I go to view a business?
First of all remember to be discreet. The owner may not want the staff to know they are selling. Always arrange your viewing through Preferred Commercial and never turn up on the spec. What sort of questions you ask will depends on several things - The type and size of business, what points are important to you and what tenure is on the premises. If you haven't already been provided with a copy of the last 3 years' accounts, ask to see them. If they are not available, ask to see financial projections. You may want to ask questions about current customers, marketing activities and expansion potential. There may be questions regarding suppliers' terms and conditions, and the sort of relationship the business has built up with them Questions may need to be answered with regards to taking over the lease on rented premises and sometimes the possibility of buying the freehold. Ask about the staff, will all of the staff be continuing after the sale? Discuss any staffing issues. It may be worthwhile to make a list of questions you would like answering before you view.
- Would I have to keep on existing staff?
There are regulations in place to protect staff when a business is transferred as a going concern. Existing staff automatically work for the new owners under their existing terms and conditions. Any staff who decide not to work for the new owners are classed as having resigned. For further information, look up Transfer of Undertakings (Protection of Employment) 2006 (TUPE).
- What is involved in the process of buying a business?
This will vary from business to business and may well depend on your particular needs. Firstly decide what you want from the business. Are you looking for regular income, or are you planning on building up a business to sell in the future? Decide what industry you wish to enter. Be realistic. Do you have the skills or qualifications required? Do you have experience in that particular industry? Are you prepared to relocate for that ideal business or are you looking for a business to fit in with your current life? Have a budget in mind, as you would if buying a house and if necessary an agreement of finance. Do you want to buy a freehold business, where you own the premises as well, or a leasehold business, where you own the business but rent the premises? Make sure you research all the relevant businesses available and make sure they meet your criteria. At Preferred Commercial, you can register your requirements with us and we will automatically supply you with information on any businesses that meet your specification. When you have found a business you would like to view, contact Preferred Commercial to arrange a viewing with the vendor. Prepare questions to ask the vendor beforehand. Remember to be discreet - many business owners do not want their staff to know the business is for sale. One of our sales team will contact you approximately 48 hours later. This gives you time to take in all the information from the viewing and decide whether you want to pursue the purchase further. Check the accounts carefully and have an accountant check them. Should you require finance, Preferred Commercial have pre-vetted all businesses to establish willing lenders and appropriate criteria. If you with to place an offer, contact Preferred Commercial, who will negotiate the offer with the vendor and inform you of the outcome. Should you not wish to make an offer, contact Preferred Commercial with some feedback. This will help us when suggesting future businesses to you. If you have placed an offer and it has been accepted you should instruct your solicitor and ensure finances are in place. You may go through a process known as Due Diligence, whereby you and your solicitor will verify the information given to you by the vendor. Once contracts have been signed and exchanged and monies transferred the sale is complete and you are the owner of the business!
