Management Rights and Preparing the Business for Sale

Preparing your management rights business for sale is a major consideration and is certainly as important as buying a management rights in the first place.I am often asked questions about the process, and to comment on the what makes the process easier and faster. Well the answer to this is no surprise; there is no easy and simple answer but there are some principles that a good management rights broker can help you with.The selling process starts with presenting the business AND the property for sale. The property of course must be as well presented as it can be, but there is a limit to what you can do. Sometimes prospective purchasers of management rights will say to me that they love the property but hate the area or love the area but hate the property or really want an extra bedroom or a bigger office. There is an absolute truth; you cannot change the number of bedrooms or the location or the size etc. So it is important that you and your broker take time to ensure that any prospective purchaser understands what the business and property has to offer BEFORE actually walking in the front door. In conjunction with my vendors I always prepare an Information Statement as part of the service to inform any prospective purchasers as much about the property as is possible. This of course is about numbers but a lot more as well. An accurate description of the area, its amenity, distances to various services, letting history, etc.This saves time, manages expectations and ensures, as much as possible that a prospective purchaser of management rights doesn’t expect to move the business to another suburb!And this applies to the business as well as the property. Some sale transactions will fail to complete because the property cannot be valued to bank expectations or the P&L has left GST in the figures or added income that cannot be substantiated etc. Although a formal valuation of the business is not really necessary it is important that if an income group is identified there is an accurate understanding of what that is and means to the business. AND more importantly that there is a reasonable expectation that it will be much the same next year or that it will increase or decline and under what circumstances. The same applies to expenses. If there is any concern about any numbers that are to be presented to a prospective purchaser then it may be wise to get a formal validation of the P&L. Preparation of your management rights business for sale is very important and there should be as few surprises as possible.For more information on management rights have a look at

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