Brokering unusual business sales

Mike Hindle, a Business Broker with over 30 years experience in business brokering, please tell us about some of your more interesting deals?

Mike Hindle: We’ve sold everything from funeral parlours to hotels, manufacturing businesses, and virtually every type of business. If I cast my mind back I suppose one of the most interesting and controversial sales was a little adult shop that we sold. 

What was interesting about the place itself was that it retailed adult entertainment stuff and had a really big mail order site. The beauty of that was you paid in advance so people would get their brochures, order on the website, order items and then send the money in advance then the owners would send the items out, and that made it a very interesting and dynamic business.

BusinessesForSale: It’s a cash-rich business in that sense?

MH: Yes. We had a lot of enquiries on the business from accountants, but the stumbling block was the type of industry it was in and it came down to what does your child say when they’re asked in class ‘what do your mum and dad do for a living?’

It was very difficult and took a long time to find a more suitable liberal buyer. This was a number of years ago and the business is still going very strong today.

BFS: Have there been any businesses that you didn’t want to get involved with?

MH: There have been a number of businesses where you just get that feeling about it’s not quite legit or there are too many unanswered questions. Part of the problem is that a lot of the buyers that come to you are very inexperienced and a lot of the time where people have bought businesses they really haven’t done any investigations on it in any way so they’ve been caught out. So if we don’t feel happy about it and can’t get the right information then we’d rather walk away. 

BFS: How can a business owner maximising their business value before they decide to sell my business?

MH: There are some things that a lot of sellers don’t take into account. The first thing you need to do is get all of your information about the business from a seller’s point of view, get your financials up to date, your balance sheets, your income statements, all your documentation and your leases. 

And have a good look at the business itself, maybe it requires a coat of paint, tidying the business, fixing any broken equipment, providing new uniforms to staff and just generally cleaning it up so that when someone comes in you give a good first impression. 

Then if you have all of your documentation it is easier for a person to do investigation and make a decision and for that they’ll pay a premium price…

How can I make my business deal happen?