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Let’s be honest, when you embark on running your own convenience store or any other business you are always told to start planning your retirement from day one, but whilst you are aware you should, you rarely do. This could include paying into a private pension plan, but as retirement seems a long way off, you always prefer to invest in the business, which is not a bad thing, but retirement can quickly come round, and you need to consider your options.

Hopefully the years of long hours and hard work will have paid off, creating a successful, profitable, and saleable business to fund retirement plans. Depending on the type/ownership of the trading premises, either Freehold or Leasehold, several options exist for owners you could sell the whole business and premises to generate a lump sum which can be invested elsewhere, such as property, to provide an income, or alternatively, should you own the premises, then the option exists to only sell the business on a leasehold basis and retain the Freehold whereby the new owner of the business then pays a rent generating an income for the previous retiring business owner.

In respect of renting out your premises, a key aspect is the quality of the tenant, finding someone with a track record who is going to pay your rent on time. A sales agent acting for you will take up references on a prospective business purchaser/tenant which should give you piece of mind, but if in doubt request a rent deposit or look for another buyer, as if you make it easy for them to come into the business it is easy for them to walk away. Factors to consider when selling your business and considering a potential tenant for the premises are:

• Financial standing of the purchaser, background assets, do they own a property, don’t be afraid to ask for a statement of assets and liabilities, your agent will request proof of funding in the form of bank statements.
• How much are they paying for the business, do they have the funds available or are they having to borrow, and if the latter can the business afford the premises rent and loan repayments.
• Background experience, are they already in the trade, do they have other convenience stores, if so, then can they provide 3 years accounts.
• Who are the referees, ideally you want an existing landlord and a bank reference or credit report together with trade references.
• Who is the actual purchaser and, in whose name, will the lease be in – a private individual or limited company? In respect of a limited company, is this an existing company or new company, if the latter then seek directors guarantees to tie the individuals in.
• Obtain a business plan to see how they intend to run the business to ensure its continued success and any new initiatives planned which could include new services such as a food to go offering if not already offered.

The quality of the tenant is a key factor should you ever need a further lump sum in your retirement and look to sell the property to an investor; a property investor will always pay more for a ‘Blue Chip’ tenant such as Tesco!

To ensure the maximum is achieved from the sale of the business and property, retailers need to ensure continued investment is undertaken in the premises, they are clean and tidy, with no major expenditure required. In terms of the business, accounting information needs to be accurate and up to date, showing consistency over the years and sound levels of profitability, not just the odd year, but 3 years of good accounts. The decision to retire could come quickly, and not through personal choice, hence it is essential for financial information always to be up to date, as if not it will always slow any potential sale down or reduce the sale price.

In terms of timeframe for selling your business, the reality is you need to allow 9 – 12 months, it can be quicker, but it can also take longer. You need to allow time for the agent to visit and discuss the sales process with you and prepare sales particulars to commence marketing. A realistic marketing timeframe to find a buyer and get a feeling for whether the business is going to sell, or whether the marketing/asking price needs to be revisited, is 6 months. You could find a buyer in month 1 but it could also be month 6, you then still need to allow some 3 – 4 months to complete the legal process which can become protracted factoring in landlords in the case of leasehold properties, banks should a buyer need to borrow money, and the transfer of staff ensuring the TUPE guidelines are adhered to. As completion approaches a considerable amount of effort is required to ensure a smooth transition to new owners factoring in:

• Transfer of premises services such as electricity, gas, and telephone lines/broadband ensuring tills and stock ordering continue to operate as normal.
• Transfer of customer services – Lotto, Paypoint, EVRI etc.
• Should a Post Office be in existence then the audit date and any training needs to also tie in with the completion date.

When it comes to finding the right sales agent to market your business and achieve maximum value several aspects need to be considered:

• Length of time established.
• Coverage of offices.
• Experience in the sector.
• Contacts in the industry – solicitors, accountants, finance brokers, stock takers, surveyors, EPC assessors.
• Do they have the expertise and knowledge to value your business.
• Reputation.
• Standard of marketing material and website.
• Marketing coverage and website portals advertised on.
• Service offered, it’s just not a case of finding a buyer, it is getting a sale to completion.
• Fees & Costs, the cheapest not always being best.
• Recommendations backed up by successes.

EMF have been selling businesses for over 60 years and if you are thinking of selling your business we offer a free no obligation market appraisal. Let us help you make your retirement dream a reality. Our ‘selling your business’ guide may be of assistance - www.emfgroup.com/downloads/pdf/SELLINGABUSINESSGUIDE.pdf, or telephone 01404 813952 for further information.