I Told Them Not to Sell. Two Years Later It Sold for $880,000

A husband and wife asked me to sell their business. Once I had been through the numbers I had to tell them it would not sell, not at a price that would get them out. Two years later that same business completed at $880,000. Jack Lee from Forward Business, a Sydney business brokerage, walks through the test a serious buyer runs on your numbers and the three things that changed the answer. Whether a business can sell at all is a different question from what it is worth, and it gets settled first. Three things decide it: whether the profit survives a buyer's accountant, whether there are two clean years to look at, and whether the business runs without the owner. What you'll learn: • The first question is not "can I get this price". It is whether the business can sell at all, and most owners ask them in the wrong order. • The same business had three profit numbers: a $39,000 loss on the tax accounts, about $45,000 once the one-offs and personal spending came out, and roughly $240,000 after add-backs. All three were real, and that was the problem. • A profit that only exists while the owners work the floor is not a business, it is a job. Buyers do not pay real money for it. • Buyers price the years they can see, never the year you promise. A six month recovery is not evidence until it becomes a full year, and then a second one. • By 2024 the staff ran the day and the procedures were written down and actually used, so $352,000 of profit after costing in proper management was believable. It was listed at $1.2 million. • A lease renewal in the middle of the campaign took $33,000 a year off the profit. When the profit moves the price moves. It completed at $880,000 plus stock. Chapters: 0:00 The night I told them it would not sell 0:35 "Can I get this price?" is the wrong question 1:11 The business: eight staff, turnover just under a million 1:56 Three profit numbers, and which one a buyer believes 3:35 Why I refused the listing 4:37 Fix one: your profit has to survive the interrogation 5:49 Fix two: show up with two clean years 6:18 Fix three: build a business that transfers without you 6:52 What the two years actually did 7:32 April 2024: listed at $1.2 million 8:40 Could it sell? What it completed at 9:16 If you are wondering whether yours would sell Questions this video answers: Q: How do I know if my business is sellable? A: Look at it the way a buyer's accountant will. Does the profit survive line by line scrutiny once the add-backs are questioned, are there two clean full years to look at rather than a recovery in progress, and does the business keep running if the owner stops turning up. A business that fails those does not usually sell at a price the owner would accept. Q: Can I sell a business that lost money last year? A: Sometimes, but the loss will be priced in and a single bad year is hard to argue away. In this deal the year had genuinely recovered in its second half, and it still was not enough, because half a good year inside a bad year is a story and a buyer's accountant pays for full years they can see. Q: Do add-backs increase what I get paid? A: Legitimate ones do, but they are not free. Every add-back you have to explain spends a little of the buyer's trust, and past a certain point they stop checking individual numbers and start doubting all of them. What survives the scrutiny is what you get paid for. Q: How long does it take to make a business sellable? A: In this case two years, because the thing that was missing was full trading years with the owners out of the day to day, and there is no shortcut for time. That is why the best exits are planned years in advance rather than decided in the month someone gets tired. Q: Does a rent increase affect what my business sells for? A: Yes, directly. Part of what a buyer purchases is the right to keep trading from your site, so the lease is part of the asset. A renewal in this campaign lifted rent enough to take $33,000 a year off the profit, and the price moved with it. Q: My business depends on me. Is it worth fixing before I sell? A: Almost always. A profit that only exists while you work the floor is a job rather than a business, and it narrows the pool of buyers who can fund it. Widening that pool is what lifts the price, and it is the single change that moved this deal most. This is a real Australian deal. Names have been changed, the sector is not identified, and no business is named. · · · 📍 Forward Business, Sydney business brokers serving all of Australia 🔗 Thinking of selling? Find out what your business is actually worth. Free, confidential, no obligation → https://forwardbusiness.com.au/free-a... 🔗 More on how we work → https://forwardbusiness.com.au?utm_so... #sellingabusiness #businessbroker #businessvaluation #exitplanning #australianbusiness