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Selling a Wood Milling Business
Expert: Vic Vahramian
Mr. Taylor asked:
My question is, due to recent serious health problems I must sell my small business. How would you recommend I go about advertising to attract potential buyers? Is there a "business for sale" directory website on the Internet? My business is in the Ottawa area and is a wood milling and manufacturing business.
Vic Vahramian answered:
Like selling a house or an automobile, one must package the business for sale in an acceptable manner. This includes:
Physical clean up and organizing of the business;
- Preparing a document that can be handed out to potential buyers and
business sales specialist agents. This document is referred to as a
"Prospectus" and includes:
- the last 3-5 years of financial statements
- a narrative of where the business has been and where the business is going
- business projections
- cash flow projections
- other information such as attachments of pictures of the machinery, drawings of physical plant, size of property and the building, etc.
This package can be created by the owner, or by a hired consultant. The fee for such a service will vary according to the length of time involved by the consultant.
My experience has been that most business owners who are in the position of selling their businesses are not familiar with the process of attracting, presenting, negotiating and selling. Therefore, they end up spending a lot of time with unqualified prospects, or scare away good prospects because of a lack of negotiating skills or unfamiliarity with the variety of combinations that one can package the sale.
Advertising in a newspaper or on the Internet is NOT a good way - rather an expert "Business Broker" or a "Mergers & Acquisitions (M&A) Specialist" will give you the best results. Expect to pay about 10% (more or less, depending on the size of the business) of the sale price as commissions. In addition, a lawyer's fee for documenting and registering the transaction should be budgeted for. This fee may vary dramatically according to the lawyer, the duration of engagement and the size of the transaction.
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About the author
V.(Vic) Vahramian is the principal of Vahramian & Partners Inc. His