No theory and no filler. These are the questions owners actually ask us, answered the way we would answer them on the phone, by the brokers who do the deals.
A business in the $1 million to $15 million range is valued on its pre-tax earnings and the risk attached to those earnings continuing without you. In practice that lands between a 1x and 5x multiple. This explains what moves a business within that range.
Selling a business in New Zealand can take anywhere from three months or more. Depending on the type of business and the amount of perceived risk will govern the size of the audience and their appetite to transact quickly.
A confidential sale works by controlling who knows what, and when. The business is presented first as a blind profile with no identifying detail, buyers are vetted and sign a confidentiality agreement before anything sensitive is released, and the rest comes out in stages.
A business broker values the business, prepares it for scrutiny, finds and vets buyers, runs the negotiation and holds the deal together through due diligence. In New Zealand they are licensed under the Real Estate Agents Act 2008 and are usually paid a success-based commission.
Due diligence should be a process of verification, not discovery. If there’s been an offer made to buy the business, that offer should have been based on all the facts to arrive at that value. Due diligence will verify those facts to ascertain whether the business will run the same, worse or better under new ownership.
Ask us directly. We would rather have the conversation than have you guess.
Rather speak to us in person? Give us a call
Call +64 21 222 1555One of our brokers will be in touch personally, and discreetly. Nothing is discussed with anyone else.