This is a simple exercise demonstrating the fundamental elements to selling your business.
Ten businesses, ranked highest to lowest by % difference between selling price and asking price, see how each of the factors line up.
Nick Lucas is a specialist business broker in at Bayleys, Dunedin, NZ. Nick works closely with businesses before the sale to ensure they are prepared, and during the sale to give them every chance of getting the best result for them at sale time.
Snapshot of Past 10 Business Sales, Nick Lucas, Bayleys, Dunedin NZ
1. Nick Lucas - Last 10 Sales
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
2. 1. Price it Right
⢠On average an accurate price will require less sale time, attract more interest and offers and sell closer to expectations.
⢠Look also at the average difference between appraisal midpoint and average sale price
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
Vs.
Broker Appraisal Midpoint/
Vendor Instructed List Price
3. 1. Price it Right âWhen the price is overly highâŚ
⢠Why risk the sale of your business by over pricing?
⢠Sales below suggest pricing above the market could result in lower sale price than had it been accurately priced initially
⢠Sale J shows an example when the vendor runs out of choicesâŚ
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
4. 2. Advertise: Expose yourself to buyers
⢠A proper advertising strategy will on average reduce sale time attract more offers and net a better Sale Price.
⢠More offers give more options: Itâs the difference between being price setter (above) and a price taker (below)
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
Vs.
5. 2. Advertise: Many Sources/ Locations of Buyers
⢠There may only be one buyer for a business and only one way to reach them
⢠There may be many potential buyers and reaching them gives the opportunity to create competition for ownership
⢠About 50% sales are to purchasers known to the broker -though relying solely on a broker may not be in your best interest
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
6. 3. The Power of Negotiation â Where the broker adds you value
⢠The ability to get the offer when there is only one (or few) buyers
⢠The ability to make the deal and bring buyers up
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
7. 3. The Power of Negotiation â Where the broker adds you value
The limited need for negotiation when you plan your sale well and create competition for your business.
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
8. 4. Other Factors â Name it & Price it
While not always possible, named business attract 30% more enquiry and priced business attract a further 40% more enquiry.
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
9. 4. Other Factors â Time on the market
On average a business sale price is 3% less for each 100 days on the market.
BUSINESS
ID/ TYPE
SALE
FORMAT
APPRAISED MP/
LIST PRICE
ADVERTISNG
METHOD &
INVESTMENT
TIME ON
MARKET
NUMBER
OFFERS
MEDIA
SOURCE
LOCATION
OF OFFERS
FIRST OFFER /
SALE PRICE
SALE
PRICE
NEGOTIATION
DIFF $ / %
LIST PRICE/
SALE PRICE
DIFF $ / %
A:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
110,000/
110,000
Internet
P. Press
$980
28 Days
5
Multi Offer
Buyer list (2)
Online
Property Press*
Dunedin 3,
Otago
Invercargill
130,000 130,500
$500
0.4%
$20,500
18.6%
B:
Service
⢠Deadline
⢠10 Days
⢠Named
300,000/
310,000
Print
Online Blitz
$1,000
10 Days
5
Multi Offer
Online (2)*
Buyer List
Property Press
Dunedin 3,
C.Otago, Chch
320,000 325,000
$5,000
1.6%
$15,000
4.8%
C:
Bar/ CafĂŠ
⢠For Sale
⢠Priced
⢠Named
150,000/
150,000
Internet
P. Press
$770
50 Days 1 Newspaper Auckland 130,000 149,500
$19,500
15.0%
-$500
-0.3%
D:
Lunch Bar
⢠For Sale
⢠Priced
⢠Named
72,500/
75,000
Internet Only
$400
10 Days
4
Multi Offer
Trademe
Buyer List (3)*
Dunedin 2,
South Otago, N.
Otago
72,500 72,500
$0
0.0%
-$2,500
-3.3%
E:
Manufacturer
⢠For Sale
⢠Priced
⢠Anon
230,000/
230,000
Nil
Broker intro only
$0
80 Days*
500 days with 3
prev. agents
1 Buyer list E.Otago 170,000 210,000
$40,000
23.5%
-$20,000
-8.7%
F:
Construction
⢠For Sale
⢠Priced
⢠Anon
600,000/
675,000
Nil
Broker intro only
$0
100 Days*
200 days with
prev. agent
1 Buyer list Central Otago 520,000 580,000
$60,000
11.5%
-$95,000
-14.1%
G:
Manufacturer
⢠For Sale,
⢠Range
⢠Anon
910,000/
1,100,000
Nil
Broker intro only
$0
62 Days 2 Buyer list
Dunedin,
Wellington
700,000 900,000
$200,000
28.6%
-$200,000
-18.2%
H:
Joinery
⢠For Sale
⢠Priced
⢠Anon
125,000/
170,000
Internet
$200
380 Days 1 Trademe South Otago 110,000 130,000
$20,000
18.2%
-$40,000
-23.5%
I:
CafĂŠ/ Bar
⢠For Sale
⢠Priced
⢠Named
375,000/
499,000
Internet
$300
290 Days*
365 days with
prev. agent
1 Buyer list Dunedin 300,000 370,000
$70,000
23.3%
-$129,000
-25.9%
J:
Wholesaler
⢠For Sale
⢠Priced
⢠Anon
210,000/
270,000
Internet
$100
192 Days*
accounts update
deteriorated
1 Targeted Buyer Dunedin 125,000 155,000
$30,000
24.0%
-$115,000
-42.6%
Average
308,250/
358,900
257,750 302,250
$44,500
17.3%
-$56,650
-15.8%
Listing Strategy/ Decisions >> >> Implementing Strategy/ Sales Process >> >> >> Strategy Outcome/ Sale Results >> >>
1
10. $$$
PRICE IT RIGHT âThere is a direct correlation between an overly
ambitious listing price (compared to appraisal midpoint) and a less
favourable final sale price. In other words pricing your business too
high will not achieve as good a result as accurately pricing your
business.
Priced incorrectly your business will sit for longer, the market
will observe the lack of demand and price it accordingly. As
well, a vendor is more likely to be disillusioned by the process.
1.9%
Use the appraisal and advice from your broker. The average
difference between the appraisal midpoint and final sale price of the
last ten businesses sold was 1.9%.
A broker works for the vendor and may list a business higher on
their instruction. Remember though, they are professionals
providing you current market advice for the sale of your business.
13
Bayleys commonly use over 13 different media types to attract
buyers. This includes both public and agent exclusive options:
online, print, direct approaches, social media and buyers already
known to the broker. Of the ten sales, offers came from 8 different
media sources. Genuine enquiry was received from every source.
Importantly many of the enquiries and offers received have come
from what we see as in-active buyer sources. That is buyers who
weren't specifically looking for a business but, having seen it, have
advanced an enquiry about a potential opportunity.
At the beginning of a business sale it is never known where the
buyer will come from but what we do know is that with
exposure comes more interest and competition for ownership.
50%
Of the last ten sales, over half the successful purchasers have
previously been known and introduced by the broker.
A brokerâs network is an important tool brought to a sale providing
some level of confidence -especially when the business may only
attract a small number of enquirers -but it is not a complete answer:
When there is a distressed sale or there is an absence of buyer
competition for ownership, business owners are price takers.
A majority of buyers are local âbut vital enquiry comes from
around NZ and overseas. Many factors including a business type
and scale will determine the ideal marketing strategy and focus.
1:5
Advertising Investment -The graph below shows the dollar
difference between the actual sale price and the initial asking price
vs. the dollar amount of advertising investment undertaken.
As a general rule I believe businesses should invest between 0.5%
and 1.0% of the value of their business in advertising and marketing
when selling their business. Based on the observed results from
the last ten sales, for every $1 (deductible) invested promoting the
business sale, the sale result improved by over $5 (capital gain).
There are strategies to promote businesses with every set of
circumstances including when discretion is required around
the business identity. Be very careful though, do not short
change your business sale by not advertising.
17.3Power of Negotiation âthe average increase we have achieved
from a first offer to final sale price is 17.3%. Looking closer, when
removing the multi offers (where competition for ownership should
extract higher first offers) we have achieved over 20% increase.
100
The first 100 days on the market are the most vital for business
ownerâs to achieve a sale outcome matching their price
expectations. On average for every 100 days a business is on the
market the difference between the sale price and the listed price
reduces by 3%. After a year your business is worth 11% less.
Be prepared, price it right and strike while the iron is hot!
10
FROM THE NUMBERS: Key points of interest