***Advertisement: Ascent Partners 25 August 2010***

In the first of many Q and As, sales expert, Richard Rasmussen answers all the questions you want to know about buying and selling a business. This week, he answers what the market is like to sell. Why not write in and ask him a question of your own.

FAQ 1: What’s the market like now to sell a business?

Answer: It depends on what you’re selling and how you sell it. There’s no doubt that business values have fallen over the past two years – usually this is a function of falling sales, falling profits, and falling values of plant and equipment. As most buyers are from the trade, their demand is usually for the sales component of the business, perhaps taking on some equipment and some staff. The demand for these sales is high.

I don’t see the market values improving for traditional offset printing businesses. Certainly equipment won’t appreciate in value and margins won’t improve. Industry sales may improve, but the question is will they return to traditional offset businesses? I’d suggest some, but not all will.   

The other aspect at play is the ability of purchasers to fund the acquisition. Often they want to do this over time, based on client retention. So the “how you sell it” is important.

I always advise clients to get a realistic appraisal on their business. Although this may not be a number they are happy with, at least it provides them with a starting point. There’s no point sticking your head in the sand, and expecting some white knight to ride into your business with a big cheque. Unless you’ve got something special, it isn’t going to happen. Better to either take what the market says now, or trade on, perhaps in a different format. But don’t expect the market for your business to improve, unless the business itself improves. 

In-demand, popular businesses are digital non-franchise, wide format and web-to-print. Also businesses that are making a good return, and have good future prospects. 

For further information, contact Richard Rasmussen on 0402 021 101 or visit the Ascent Partners web site at www.ascentpartners.com.au