When we list a business for sale, the seller always asks us, ‘How long will it take to sell?’ This is a very ‘open-ended’ question and with an open-ended answer also. We always respond, ‘How long is a piece of string?’ because we can never be sure, even though there are certain parameters. If the business is priced very keenly, it will sell rapidly. However, very few sellers are that desperate to sell, that they feel compelled to price their business in the ‘bargain’ category.
I sold a motorbike retail business last month that we first listed back in February 2015, 15 months ago. Naturally, the seller asked me the inevitable question to which I stressed that it may take a while to find the ‘right’ buyer. As a general rule, motorcycle businesses are only purchased by a buyer who has either been in that industry before, or has a keen interest in motorbikes.
We had a steady flow of enquiries for the business, 48 in total, before we had a buyer sufficiently interested to go to contract. The financials of the business didn’t reflect too well on the business, which is what turned most people off. But every business is saleable, if the price is right. The vendor saw sense and was more realistic about his opinion of the worth of the business, but only once a buyer had signed a firm contract. The market always rules when selling a business, and the market rarely gets it wrong, either. Once the seller sees the signed contract, with a deposit paid, it is a firm legal commitment for the buyer to hand over a big cheque for his business. It changes everything. This is reality, not hearsay or the opinions of accountants or bankers – it is going to happen. The seller ‘met the market’ and made the right decision to accept a price for his business that was below his expectations, but reflected what the market would pay for his business. It took a long time for the seller to be convinced, but the deal was done.
The seller was ready to retire, the caravan was in the driveway and he and his new wife were ready to do ‘The Lap’ of Australia. The buyer was an experienced business owner, so he had no difficulty obtaining finance and convincing the landlord he’d be a good tenant. As we suspected when we started the selling process, the buyer is a keen motorbike enthusiast and the idea of owning 28 motorbikes was very appealing! The new owner has the drive, the enthusiasm and the passion to take this exciting business to its next level of success.