Advice page

Newsagents selling your business:
Financials, Presentation & Services, Appliances, Suppliers.

Financials

Right! You want to sell your business but, have you given the subject enough thought? Two very important issues to consider are the financials and presentation.

First, valuation. Everyone selling their business wants to know its worth, and what’s the maximum achievable price? Obviously you want to receive the best possible price so at this stage you want a valuation. “Valuation advice free, no obligation, no sale, no fee”. This is the ‘free biscuits’ offer by the business transfer agents. Something for nothing sounds good but if you have been in business long enough, you will be aware of the old saying, “There is no such thing as a free meal". This offer is simply the old foot in the door ploy. By all means, have your business professionally valued but don’t sign any agreement at this stage.

The next proposition is for you to consider selling privately. This will save a lot of money, commissions and hassle. This is not a difficult task to undertake at all. Still on the topic of financials, have you prepared copies of 3 yrs accounts to show your prospective buyer on his visit to your business? Get a few copies printed and place then neatly in a folder. The prospective buyer will want to take these away for further study. Talk to your own accountant ensuring you keep him/her in the picture. He/she may suggest preparing a few sets for you. Also have last month’s bills to support your bookkeeping report, along with bank statements showing paying-in entries. You need to impress your prospective buyer with your efficiency, organisation and tidiness with figures. You want your client to leave, feeling buoyant and impressed with your efficient, professionally run business. A lack of attention to detail could mean your buyer departs feeling dismayed or disappointed. Remember when you first took over the business and how you wished there had been a little more help forthcoming? Well, your buyer will need all the help and advice you can give so will appreciate any offers of support you feel you can make. At the earliest, convenient opportunity, inform your solicitor of your intentions so that he/she can be making some preparations. It is surprising how many weeks can lapse between legal correspondence involving buyer and vendor.

If your business is on a lease agreement, be fully aware of the main points and terms of the agreement. The new entrant taking over will need to be informed of the terms and details so, by typing these out in advance, you will save time having to dig them out later. Make sure you are organised. Do you know in which file to find them? Do you need a copy from your solicitor or landlord?

Does the length of term remaining on the lease need reviewing? If there is only a limited period left on the lease, can you obtain a letter of intent from the landlord to extend the period? Perhaps you can arrange for a new lease to be offered. The new entrant will need this assurance so by obtaining this consent in advance you will save more time later and once again convey to the purchaser that he is dealing with a professional. Remember, not only are you skilfully trying to make a sale, you are trying to achieve a smooth changeover as well. Your prospective buyer will be fully occupied running around to his own Advisors, Bank, Accountant, Solicitor, etc. so it will help enormously if he does not have to keep asking you for various documents, queries and legal information.

Have all this paperwork placed neatly in a folder and itemised for easy identification. The buyer can then refer to it easily; all these practices will save time and be more efficient for all parties.

Presentation

This is also a very important area of good sales practice When you sell a vehicle privately, to achieve a good price for it what do you do? You tidy it up, have it serviced, polish the paintwork and clean the upholstery. You create a nice, clean, well cared-for product. Attention to these details can help you to make a sale and get your asking price. Your Business and property are no different. You need to create a good clean image, a well cared for establishment. Everything must be tidy, in place, polished and clean.

So ask yourself, is every piece of shop merchandise and products in the right place? Is it presented well and are your displays tidy and arranged in the right order? Are the magazines and newspapers in the right place and kept neat and tidy? This is a task you are continually attending to during a normal business day but when trying to sell your business, it takes on even more importance. Are all your shelves stocked up? (Any unfilled spaces on the shelves and display cabinets will do you no favours). Are all your greeting cards presented well, topped up and tidy? All your stock items should be displayed in an attractive and tidy manner.

Next, lighting. Look carefully at the ceiling and/or wall lights with a critical eye. Do you need to replace some of your lighting equipment or maybe give them a good clean? Good, clean and well-planned lighting can improve and help your shop’s image.

Now consider the floor, an area of great importance. A drab, dirty floor will convey the impression of a slovenly-run business. So, can any improvement be made here? A small investment in a bright, easy-clean floor covering can make a huge difference. It’s better to spend a few hundred pounds to get the image right, than reduce the price by a few thousands pounds which is what will happen if you create an undesirable impression on the prospective buyer.
Has your shop got a lot of clutter? It’s time to get ruthless! Look above the canopies under shelves and in stock rooms. If you find any empty boxes, cartons, old stock then get rid of it or move it completely out of sight. Is your back office tidy and looking professionally efficient? Check everywhere is kept clean and orderly. Does the toilet area smell fresh and is there a clean towel next to a sparkling hand basin? (Not a threadbare, grey rag hanging from a nail next to a grimy bowl). Every newsagents will acquire more than enough clutter on Saturdays and Sunday mornings with the week-end supplements to deliver, computer listings etc. but you must make the extra effort to get rid of any surplus and file anything that must be retained. Any old stock taking up valuable selling space must be moved or replaced with faster selling lines; promote some offers or introduce new products.

What about the shop window? Remember the truism that first impressions count. In your case, the shop’s exterior and the shop window in particular, will make the first impression on your prospective buyer. If that impression is not good then you’ll be trying to recover lost ground throughout the remainder of the viewing session. So go outside and take a critical look then ask yourself, “Will they be impressed with their first view of my shop or will they see a congestion of untidy advertising literature obscuring the products I’m trying to sell?”

Does the outside shop frontage welcome you in or would it benefit from a makeover? You must certainly make sure the windows are clean and perhaps consider a new coat of paint, neither of which are expensive remedies. What about the back yard and/or the garden? Tidy it up and maybe invest in a few pot plants!

If all this information seems basic and obvious, that's how it is intended. It's surprising how many retailers fail to act on these simple ideas. Presentation, service, image, attention to detail, cleanliness, tidiness, some of the most important areas of retailing are the simple jobs. Keeping the place clean, restocking the shelves and display areas, the impression you must create with your customers is "Call again. This is a nice shop to visit". Always remember you are competing with other retail outlets for sales. Embrace these simple ideas because they will enhance your opportunities, both for promoting your products and promoting the sale of the business.

When you put the lock on the door each evening, take another look at the adverts in the window. Are they attracting buyers into your shop or are they advertising someone else's business and products? Think about it!

Services, Appliances, Suppliers

Your Gas, Electric and Central Heating appliances, need to be serviced regularly and be certified as safe and fit for purpose. Have you got your certificates of safety checks? Your new buyer will certainly be getting advice from his/her solicitor regarding all these issues so please take the trouble to have all these appliances in good safe working order and the relevant paperwork as proof. This will save a lot of valuable time, so keep copies in the folder you’ve prepared for your prospective buyer who will need them, along with the financial details.

What about the front forecourt of the shop? Are there any broken slabs, or uneven surfaces which need repairing? Whose responsibility is this, the Local Authority or yours? Look at the deeds or lease agreement.

Consider the Insurance on the property and third party liability. Can you give the new entrant any advice or help here? When does the current cover expire? Does it cover for losses? What is the stock value covered? Can you give some helpful advice here to the new buyer?

Are you conversant with local by-laws relating to licences, trading and youth employment? Current employment legislation, shops and offices act etc. The new owner may not be as familiar with this knowledge and obligations as you are so any information or enlightenment you may be able to pass on will be helpful and appreciated. Addressing all these issues will help for a smoother transition. It is amazing how you can easily overlook the smaller issues which seem unimportant or forgotten. Until the time to sign the contract looms, resulting in unnecessary delays and frustration.
Training and familiarisation! Will the new owners want some instructions or training regarding stock ordering, cash control, basic bookkeeping, V.A.T schemes, organising rounds, EPOS systems, computer accounts etc. An offer to give training before and after changeover may be necessary to give some confidence to the new owners in order to progress. Many new entrants feel daunted and dejected when having to absorb all this detail so better to give your advice and instruction in small doses. Remember the news sheet, explain the content to the new owner, terms and conditions of supply from the wholesale house.

Provide details of all the wholesale suppliers you do business with. This information will be important to the prospective buyer so keep a few invoices in your general folder. The new owners will need to understand where his/her supplies are coming from and on what terms, and what times/ frequency, (daily, weekly, or monthly). To advertise your business/property for sale on the internet, go to Sell Online, complete details and submit. Save yourself thousands of £££££ in commission fees. Call 01773 862513 NO Agents….NO Commissions….NO Hassle

For more information and details contact J G Hudson on 01773 862513

Business Sales and Advertising
J G Hudson
40 Prospect Avenue
South Normanton
Derbyshire
DE 55 2BA
Phone 01773 862513