Parting with any business is a momentous decision and the process can be fraught for everyone involved.
Often family-run for generations, farms can be particularly difficult to let go. Because of this emotional attachment, not to mention the enormous effort it takes to keep a farm running efficiently, getting outside help from business-sales experts to find a suitable custodian for the business is especially advisable.
Outside professional help
Using a business broker and/or solicitor experienced in selling businesses can be a great help from the very beginning of the sale process until the very end.
This includes choosing the most appropriate valuation method for setting a sale price.
The ins and outs of selling can be complicated and overwhelming, so you need to get your head around all the legal jargon - which a business-sales expert can also help you with.
Define your goals
What do you want to achieve from the sale? Consider timescales and whether you want to sell the farm as a whole, or split into lots, as well as whether you'll include any residential property in the deal.
Timing the sale of a seasonal business
No other sector is more seasonal than farming. The spring to mid-summer, when crops are flourishing, is a judicious time to have your farm on the market.
If pedigree livestock forms part of the deal, then it's worth timing the sale to coincide with the time of year when breeding stock prices peak.
Preparing your farm
First impressions matter. If your farm is in a state of disrepair, prospective buyers may be unable to see past all the work that needs doing.
There are plenty of buyers looking for a fixer-upper, but they do so in the hope of a knockdown price - so get your property as presentable as possible to maximise your sale price.
Here are a few jobs that might be worth doing - in addition to anything else where the impact on the farm's 'first impressions' appeal will make the time and effort expended worthwhile:
- Fill in potholes
- Mend any fences or gates
- Clear and fix gutters
- Clean out livestock sheds and fix any equipment therein
- Keep weeds under control
- Top grass your fields regularly
Try to resolve any outstanding legal or regulatory issues around things like lapsed permits, rights of way, private water supplies or local developments.
Anything you don't get resolved you should be up front about, as soon as you've qualified your buyer. No factor is more important than trust in the psychological dynamics of a business sale.
Get your paperwork in order
Long before you put your property on the market, you should be keeping meticulous records of your accounts, taxes and other key paperwork. Having a solid financial history and an extensive paper trail will set you up for a smooth transaction with fewer delays.
Here is some information specific to farming that the buyer may wish to see:
- Cropping: Generally about five years of farm records
- Yields. About three years of farm records
- Soil testing results
- Lambing percentages
- Calving rates
- Milk yields: Average per cow
- Drainage plans: Including any recent improvements
Every prospective buyer wants to know what they're getting themselves into. Do all that you can to reassure them that your farming business is the best choice for them.
Marketing your business
What are your farm's unique selling points? Perhaps you've cornered the market for a particular breed of pig or high-end dairy products. Or you may be known as an eco-friendly producer.
If you've any awards or certificates to back up your claims, then mention them (without compromising confidentiality) in your business-sales advert on BusinessesForSale.com and have proof of your accolades to hand during negotiations.
Buyers are always interested in finding untapped potential. Are any of your assets underused? Are there any lucrative markets your farm is equipped to diversify into?
Perhaps you had exciting plans for new revenue streams before you decided to sell up. You could share your vision with prospective buyers.
Business as usual until the very end
One of the biggest mistakes you can make is neglecting day-to day operations because you're so focused on the sale process. Few things will alarm a buyer more than if standards noticeably slip in the months - it's not usually a quick process - it takes to sell your business.
Moreover, you can never be certain when the sale will conclude - delays can occur for a variety of reasons - if the sale concludes at all. The buyer can walk away at any point before the final sale agreement is signed.
So keep on running the business as normal - another reason why professional help comes in useful. A business broker can liaise with the buyer and manage paperwork while you concentrate on keeping the farm running efficiently.
Ready to sell? You are minutes away from advertising your business to 1.3 million prospective buyers. Sell your business today.