County Business Sales Yorkshire are Business Transfer Agents specialising in the sale of Hair and Beauty salons.
IS IT THE RIGHT TIME TO SELL?
Corona virus has put a spanner in the works for the Industry, but Businesses are still being bought and sold, you just need to avoid the “chancers” who bid low on every offering, hoping to catch somebody who might be desperate!
The right time to sell your business is when it is the right time for you. Before you even consider putting the business on the market, ensure that your paperwork is in order such as 3 years accounts and make sure you are familiar with the basic terms of your lease.
It is unlikely the market will return to the heady levels before 2008 as banks are unlikely to lend in the same irresponsible manner they once did. Now also we have the virus to contend with and all of us hope and pray that some safe form of medical intervention, be it a vaccine or anti-viral drugs will help in the short term.
This affects the market value of business sales as potential purchasers are restricted in the way they can raise the finance to purchase. Historically a typical salon will achieve a final selling price of approximately 1.5 to 3 times its adjusted Net Profit, depending of course on factors such as location, length of lease, quality of fixtures and fittings and specialist equipment. Ultimately your business is worth what someone is willing to pay for it, and no more.
How do I start?
Selling a salon is a tricky business. You can do this either by instructing a Business Transfer Agent or you can contact likely purchasers yourself, maybe a member of staff wants to own their own business? You could also try placing adverts yourself in the trade press or one of the many business sales websites. However, this is likely to cost you and it is easy to spend many hundreds of pounds and still not secure a buyer. It can also be incredibly time consuming and you will have to handle the complicated and stressful transfer yourself.
A reputable Business Transfer Agent will know the market, will pay for all advertising, deal with the many interested parties and time wasters, and present the business in the best possible light.
Once an offer has been secured, most agents will arrange for references to be secured from the purchaser’s bank etc. for production to the landlord’s solicitor in relation to the transfer of the lease. They will also liaise between you, your solicitor, the purchaser, the purchaser’s solicitor and the landlord and the landlord’s solicitor. A typical deal from offer to completion will take between 2-3 months.
How to choose an agent
Business Transfer Agents work in various ways, some charge up front while others operate a no sale no fee policy. Beware of agents who inflate the value of your business simply to extract an up-front fee from you.
Ask for references from the agent, Google the agents name with the word “complaints” after it to see if other people have used this agent and have not been happy. Ask if the agent who visits the salon will be the same person who actually works on your file or will you be dealing with a faceless individual at a call centre who has not visited your salon? Is the agent local and knows the area?
Selling a business is stressful. An agent acts as a buffer and suggests compromises to situations that would otherwise lead to the sale collapsing.
An agent may also reduce your legal bills, by drafting Head of Terms agreed by both parties. This saves the solicitors time and therefore your money and prevents disagreements between both parties.
So, those are our initial thoughts, if you require further help email me at: firstname.lastname@example.org OR Ring me on 01904 295555.