Information on selling a business:

Selling your business can be one of the most rewarding days of you ever experience.  The opportunities provided by selling your business may be as exciting as was the day you  started you business or made your first sale.  It may allow you the ability to start a new life, do something completely different, retire, or just take a well deserved break from the long, hard, pressure filled days that can be common for a business owner.

ONE THING IS FOR SURE, YOU WANT TO GET THE MOST POSSIBLE FOR WHAT IS POSSIBLY ONE OF YOUR LIFE’S BIGGEST ACHIEVEMENT AND BIGGEST ASSET.

Do any of these sound like you?

• You feel you have conquered your current business area and are looking for a new challenge
• You have worked hard all your life, or at least the last few years, to build up your successful business
• You are starting to think about what to do with the next stage of your life and where it might take you
• Your kids have gone off to create careers of their own, and don’t want to, or aren’t ready to take over your business.  Quite possibly, you may not have any kids as well.
• You dream of one day buying that luxury boat or sports car, but have not had the time to do it or the liquid cash available to make the purchase
• Maybe you already own that boat or car, but dream of having the time to actually use it

People decide to sell their businesses for many different reasons:

• Business outgrows the owner’s capabilities
• Retirement
• Relocation
• Divestment of a non-core business activity
• Family succession planning
• Capital injection required to grow the business
• Health or Personal reasons
• Burn out or Boredom
• The reasons for selling a business are as varied as business owners

Whatever the reason, EBG can provide the required expertise in handling the sale of your business.

Contact us today to schedule a no-cost consultation and pre-sale evaluation on your business.

Why Choose EBG?

FREE business evaluation
Your qualified EBG business intermediary will provide you with a no cost or obligation pre-sale evaluation of your business. That way, you will know what price you may expect to achieve from a sale, and make an informed decision as to whether selling is a viable option at this point in time.

Step-by-step guidance

• How to find and attract the right buyers
• How to present your business for maximum value
• How to close the sale
• Confidentiality Assured

At EBG, we pride ourselves on confidentiality and protecting the proprietary business information you entrust us with.  You can be assured that each and every time we show or discuss your business with a potential buyer, that buyer has signed our strictly worded confidentiality agreement.

Discreet and Creative advertising
Elite Business Intermediaries are not in the publishing or advertising business. We use only advertising that works and that will generate real leads for the sale of your business.  We do not advertise to advertise, but to actually sell your business.

Thousands of Buyers waiting
EBG maintains a database of qualified buyers that is constantly being updated.  This is a huge value to you as we don’t have to wait around for inquiries and interest, but can begin approaching potential buyers the first minute we list your business.

Experience

• Extensive knowledge of Thai Business
• Outstanding reputation amongst business owners
• Quality businesses
• In our experience, and because we are paid only when we have successfully completed your sale, we list only businesses we believe are marketable and saleable in our marketplace.

What you should expect as a seller
Upon first contact with EBG, you will be asked to supply some basic business information over the phone or email, to enable us to gauge the possibilities of selling your business. 

We will then set up an initial viewing and inspection of your business and premises (if applicable) and consult you on setting the marketable price.  After agreement of the price, we will compile an attractive business profile and presentation and begin working as your appointed business intermediary.  Some of the information EBG requires includes, but is not limited to:

• Both audited and real financial reports for your business (Audited accounts, P&L, Balance Sheet, Asset Register, preferably for the last three years)
• Copy of lease agreements
• Copy or information of any contractual agreements
• Photographs
• Websites
• Product samples
• Client lists
• Any other information that is necessary to fully represent your business to qualified prospective buyers

Having the complete information on your business in the beginning means that we have the ability to answer more questions and provide better information about your business to our potential buyers as well as limits the interruptions in your business day.  Let us do our job, so you can keep doing yours.

We determine the most likely source of buyers for your business - our own extensive and growing database of prospective buyers, the internet, direct mail to selective industry lists, advertising; local, national or overseas, which publications might reach them.  Currently we use both English daily newspapers (Bangkok Post and The Nation), Bangkok Trader, Big Chili Magazine, as well as a number of industry websites.  We are constantly fine tuning our advertising to bring you the most quality prospective business buyers for your Thai Business.


If any specialty advertising is required or requested, we will first get you authorization and then place the advertising.

As professional business intermediaries, EBG will handle all inquiries from all sources.  EBG will qualify all potential buyers and identify time wasters, tire-kickers, nosy competitors, and hopefuls lacking the capital to affect a business transfer.

After qualifying and consulting, interest is shown by a genuine buyer and an initial viewing and inspection is arranged.  Depending on the type of business, the buyer w\may choose to view the business as a customer, confidentially, to gauge his initial interest in the business.  For other businesses, an appointment and tour is essential for the potential buyer to gauge his real interest in the business.

After the initial viewing and possibly a few subsequent meetings between buyer and seller, additional information on the business may be required.  EBG is a specialist in preparing and delivering the necessary information at the right time.  Your intermediary will consult you on this at the outset of our relationship so that we can limit the disturbances to you and your day-to-day business operation.

Simply contact us for any further information you may require.

Setting a realistic asking price

Setting a realistic asking price is the first, and probably most important step in the business sale/transfer process.  Your EBG Intermediary can assist you in setting the price during the presale evaluation stage.

There is a fine line in pricing your business high enough to leave room to negotiate and overpricing your business and scaring off potential buyers.  There is also a risk of undervaluing your business, which does little more than creating skepticism in the eyes of potential buyers making them more wary than they might be at a more realistic asking price.

For these reasons, and as the first part of our selling process, EBG will provide a no-cost, no-obligation appraisal of your business, so that you have the ability to:

• Make an informed decision as to whether selling your business is a smart option for you at this time
• Ensure that you price your business competitively and correctly allowing for a quick sale at as close to full market value as possible.

Getting the best price for your business

Selling a business is essentially the same as selling almost anything else that you might sell, including the products or services you sell today.  Yes, it may be more dynamic, but it still follows the normal rules for other types of sales.  Your main question should be this. What is the buyer looking for?  Treat the buyer like a customer and think about what you can provide for them to make their decision easier.  Both buyer and seller are looking for something here, so why not make both sides happy?  You have a business, and the desire to improve your position by turning that asset into cash.  The Buyer has cash and is hoping to improve his position by turning his cash into a business.  Why not yours?  Always be thinking what you can do to help your buyer reach his goal, and you will find it easier to reach yours.  Your EBG intermediary can assist you in finding ways to give your buyer what he is looking for, so that you can get what you are looking for as well.

When deciding to sell your business, you may start out with a very high value for the business.  This is natural as you have put your blood, sweat, and tears into the business over the years and expect to be handsomely rewarded for doing so.  As time goes on, normally your perception of an acceptable price will likely diminish, usually relating to one or more of the following factors:

• You desire to retire
• You want or need to relocate
• You have burned out or become bored with the business
• Partnerships circumstances have changed or disputes arisen
• Your family circumstances have changed
• You are frustrated with working to hard or too much
• Capital requirements to grow the business are wearing on you and your business
• You are offered sufficient price which, combined with any of the above, motivates you to part with your business.

A buyer’s motivation and idea of fair price has a lot to do with their accumulation of capital and their very genuine fears of risking that capital on a business purchase, and possibly losing it.

Their interests will move closer to your interests when their fears of losing their money are outweighed by confidence factors to an extent where they will begin seeing positive value in your business.

The factors which might shift their perception of the value of your business closer to yours might include:

• Synergies with their current/previous business
• Wanting to build on or utilize your client base
• Wanting to acquire new technology or processes
• Reliable and attractive real owner benefit
• Experienced personnel
• Pride of ownership
• Changes in family circumstances
• Changes in employment circumstances or availability of desirable employement

On the other hand, the factors which might shift the buyers perception of value away from yours might include:

• The perception that your business requires too much of your personal involvement
• Lack of business systemization that allows a new owner to fill your shoes easily and quickly
• Unreliable or unsubstantiated real owner benefit figures
• Insecurity about “agreements” with suppliers or customers. 
•  

For a successful business transfer to take place, both buyer’s and seller’s interests must eventually meet, at a point where the buyers evaluation of your business meets your requirement for compensation for all the time and energy you have put into building up your business.

The difference between you having to discount your selling price and the buyer having to pay a little more for your good business is documentation.  The greatest barrier to getting a buyer interested in acquiring your business is their fear of losing their hard-earned money. The most effective way to prove the value of your business to a potential buyer is to instill confidence that he is risking his cash on a business that has a high probability of success.  If you can do this, you can be assured, if you have set a reasonable asking price, that it will likely be a buyer who is making the effort to buy your business rather than you making the effort to sell it.

Because a potential buyer usually knows very little about your business, you must prove many things to him in order to affect a business transfer.  This can be done by providing the necessary evidence to him at the right time.

PREPARING FOR A SALE

1. Owner Redundancy

One of the buyers biggest concerns is that you are the heartbeat of your business.  He fears that if he takes over and you walk out the door, the business may walk out with you.

Without realizing it, many business owners are in just this position.  You built the business, around you, and you alone possess the skills and knowledge to make the business work.  This problem can be magnified by an owner’s inability to delegate responsibilities and essential business functions.

In the eyes of a potential buyer, rather than having a business, you actually have a very demanding job that you find impossible to resign from.  If a buyer feels like this, he will likely move on to another opportunity as he sees paying you for this job as rescuing you from your shackles and placing the burden on his shoulders.  What you need to do is..

2. Systemize your business

As a small business owner, you may have found it very difficult to systemize your core business functions because you felt no one can do the job better than you.  This again is a delegation problem.  When you have all the various responsibilities and function within your business systemized and thoroughly documented, delegation becomes much easier. Each employee should clearly defined roles and functions, a chain of command, and a designated set of tasks and procedures which, when carried out competently, leads to measurable and desired outcomes.

This is a business that a buyer can see himself taking over and making a success from day one.

3. Document your business

Having a business plan allows you, and everyone on your team, to know where your business is headed and what the plan is to get there.  As a potential buyer, knowing which direction the business is heading before you take the wheel can be a huge advantage and even a selling point.  You will not only plan the future, but document your business processes and procedures so that everyone knows how a task is performed and what happens when it is completed successfully.

As well as documenting your procedures, it is also a big advantage to document you \r relationships with suppliers, customers, and any other parties that you deal with in the operation of your business:

• Suppliers. While you may conduct your day-to-day business on verbal, or gentlemen’s, agreements, this is not concrete evidence of some of the key components of your business.  Converting these into written agreements instills confidence with your potential buyers.  Even if you are doing this simply because you want to sell your business, you may find that by doing so you actually improve you relationships with suppliers and possibly open and streamline your supply chain.
• Customers. Negotiating written sales agreements with your customers gives your business a position of strength, not only with your potential buyer, but also with your suppliers.  If they know you are selling more, they will want to supply you more as well, hopefully with a more attractive price or better terms.
• Other parties. Always keep a record of your relationships with any pertinent agencies, organizations, Administrations, and other entities that can influence your business.  This allows you not only to demonstrate your standing in the business community, but will also help to ensure your, and your buyer’s, longevity in the market.

4. Document your profit performance

Most small and medium sized business are very well aware and savvy about tax concerns.  While this awareness certainly helps your bottom line, it can often lead to a tough situation when selling you business.  As you get creative with your revenues and expenses, in order to minimize tax liability, it often times becomes difficult to prove your real profitability, or real owner’s benefit, to a prospective buyer.

The best solution for this is to utilize clear, legal, and straightforward tax avoidance strategies that meet your goal of reducing tax as but still allow you to clearly demonstrate your real profitability, or real owner’s benefit, to your buyer through financial recasting.   

• Monthly financial reporting.  With the view of offering transparency to your buyer, you should produce monthly reports that monitor and gauge the performance of your business.  This demonstrates to the buyer you have full knowledge and control of the financial aspects of your business as well as reduces the chance that you are unable to fully understand the financial picture of your business and the real owner’s benefit.
• Keep good record of “Cash Sales.”  Many businesses are able to sell goods or services that often fall under the tax authority’s “radar” in the form of cash sales, or black sales.  While EBG does not recommend this, it happens in many businesses, and thus should be carefully documented so that you can demonstrate the real revenue and profitability, or real owner’s benefit to your buyer.

5. Housekeeping Items

The best chance you have to sell your business is the first time a potential buyer sees it.  Just as in many other things, first impressions are everything.  While you may not take an offer or close the deal right then and there at the first viewing, your buyer will form an immediate impression on your business and it CAN make or break the deal no matter how good the numbers look.  Here are a few simple things you can do to create the best first impression possible to a prospective buyer.  These may seem like obvious things, but take a look around anyway just in case you may have missed something.

By doing these things, you will surely increase the perceived value of your business to your buyer, but you may also actually convert the improvements to cash and healthier figures.  This will obviously have some value to you, but even more importantly, your buyer.

• Streamline your stock/inventory. Liquidate dated, dead, or slow-moving stock/inventory items. This will boost both your revenue and your gross profit. Your buyer will surely be more interested knowing that you are holding only salable stock/inventory and also feel comfortable that he is paying only for items that he will be able to turn into profits.  It will also ease the negotiation as there will be less haggling over valuations of the stock/inventory when the time comes.
• Polish your furniture, fixtures, and equipment. Turn your workplace into an efficient and pleasant working environment. Show that you are conscious about maintenance by touching up painted items, fixing minor blemishes, and generally freshening up the areas that need it. Reduce clutter and earn some extra cash by selling of any unused equipment and other items that only take up space.  Look around with the eyes of your buyer.  Does everything look like it is in its place in a well presented and profitable business?
• Rejuvenate your staff. If at all possible, encourage staff to take any leave or holidays before a sale.  It may also be worthwhile to invest in uniforms, or at least instill a new sense of pride in your employees during the time of a sale.  Your buyer can tell when the staff is bored of their work, and also if they are proud to work where they do.
• Sort out Debtors and Creditors. One of the biggest concerns for your buyer is the current state of your debtors. Based on the financial information you provide, the buyer has to forecast his cash flow and working capital requirements.  If you have customers who are notoriously slow in paying, now is the time to get them in line as your buyer may be very hesitant to take on such accounts.  By doing this, you can use this cash to pay your creditors earlier, possibly gaining you early payment discounts and giving the buyer an impression of a very strong and healthy business.
• Streamline your balance sheet.  Over the life of your business, you have bought and discarded different items and likely have kept them on your balance sheet.  Now is the time to delete these unrelated items as well as add any items that you may have overlooked recently.  This gives your buyer a clear picture of your financial situation as well as demonstrates to the buyer that you have a firm grip on the financial aspects of the business you are offering to them.

Finally…

Fear and uncertainty

The two biggest hurdles to selling your business are Fear and uncertainty.  Until you can calm or alleviate these fears in the mid of your buyer, price is not even a consideration.

There two ways, and two ways ONLY, to reduce or eliminate the fear and uncertainty in your buyer:
1.   You can price your business so low that the "Bargain Factor" overcomes the buyer skepticism, or:

• You can prove the value of your business through adequate and genuine documentation.

As the quality, quantity, and clarity of your evidential business/profit documentation increases, the fear and uncertainty of your buyer decreases and turns to confidence.  The more confidence you can instill, the more enthusiasm will be generated.  Once you have this enthusiasm, you can create a higher perception of value and are much more likely to get a higher offer, or better yet, a full price acquisition.

At EBG, we would like to have the opportunity to turn your buyer into a true enthusiast of your business.  Many sellers find that after they heed our advice and take a newfound interest in their business that their work is much more enjoyable and even sometimes have second thoughts about selling.  We look forward to handling the sale of your Thai business and getting you the best price possible in the shortest time possible.  Contact Us today for a free consultation.