Marine Industry Business Specialist Mick Godwin Explains
Many boat owners are business owners, and at some point, they decide it’s time to swap the time they spend in their business for more time out in their boat. Despite some similarities between selling the two assets, for example, commission structures and timeframes, a business can present far more stress if you are underprepared.
My name is Mick Godwin, and I specialise in selling marine industry businesses. Despite a vendor selling their houses, cars, boats and the like, they are rarely well versed in what to expect when selling their business. So, this article will hopefully shed some light on the high-level steps in what you can expect when selling your business.
A successful sale takes planning, patience and an excellent understanding of who the buyer is and why the business is precisely what they are looking for. But before all that, you need to ask yourself, is there anything more you can offer your business before starting the process? And if you are happy with the prospect of selling, the next step is to talk with a business broker. If the broker serves you correctly, you can probably expect to follow these steps.
STEP 1 – You’ll be required to start gathering some information so your broker can understand the market value of your business. Whilst you’re collecting this, talk to your accountant about your plans to sell and understand any tax implications that may arise. To do this, start gathering your financial data and sales history together. If you’re involved in the business, you’ll need to provide payroll summaries and BAS statements to substantiate your earning reports.
STEP 2 – Marketing; I don’t think a house has been sold without a marketing budget for 20 years. Still, this comes as a surprise for some. Business sales aren’t Gumtree ads, you should budget between $3000 – $5000 for most businesses under $1million, and it can go up from there. This money goes to professional copywriters, SEO people, graphic designers and administration staff. Your marketing should be targeted and professional; understanding who your buyer is and where to find them is why you engage a broker.
STEP 3 – At this stage, your focus is back on running your business. In the background, your broker is answering calls, making calls, returning missed calls, emailing old leads and replying to new leads. Unlike boat sales and definitely not like real estate, this process can take many months or even years. It can even take months to get an offer from a buyer, let alone another few months to work out the conditions so we can have a conditional contract signed and deposit paid. So don’t think this part happens quickly; it does not.
STEP 4 – Calling it the settlement stage is a little misleading. If you now have an agreed price, there is a genuine risk your solicitors can bog the deal down whilst putting your legal bill up. Again, another reason why a good broker is vital. If your broker has used the last few months building rapport and becoming a trusted advisor to both buyer and seller, they can help the parties agree on a sticky clause without doing a disservice to anyone. Sometimes, commercial minds help legal minds not lose sight of the forest through the trees. Once signing takes place, you now should have an obvious path on what conditions need to be met so you can proceed to settlement and get back out on the water.
I’ve just described the broad steps you need to take to sell your business. It takes time, and the best advice I can give right now is always to be prepared for sale. If you wish to talk more about you and your company’s plans, then get in touch with me via the details below. I’m based right here on the Gold Coast, but I look after businesses right across the country because rarely your ‘best’ buyer is your neighbour.
Mick Godwin Ph: 0416 638 154 mickgodwin@benchmarkbusiness.com.au
Published in print October-December 2022
