Why spend $100 to advertise a business worth $1,000,000

Both of these transactions are very personal and emotional experiences, and the importance of the outcome often raises questions in your mind;

How do I get the best price?
Who knows my house/business is for sale?
Are there interested buyers that don't know my house/business is for sale?
Am I missing out on achieving a better price for my house/business?

You invest money in advertising to achieve your aim of selling at the best price, but also to give confidence and a level of comfort that you are not missing potential buyers who might be willing to pay more.

Let's compare selling your home and selling your business, and see whether or not the answers for those 4 questions above are provided.

In the real estate industry it is a general rule of thumb that you spend 1% of the expected price of the property on marketing. That being the case $10,000 worth of marketing would be done for a $1,000,000 house. Now, you might think that seems like a lot to spend on marketing, however once you add up all the components of the marketing campaign, it's often difficult to stay within that budget.

Typically, any campaign will include;

• the board at the front of your property
• glossy brochures for open for inspections etc.
• local paper - multiple editions
• major paper - multiple editions (The Age, SMH etc)
• websites (agent's site, realestate.com.au, domain.com.au, etc.)
• other printed publications (group booklets etc.)

The cost of the marketing in most cases is incurred by the vendor, or property owner, not the real estate agent. This is not always the case, and is usually determined by the area, and the level of competition between the local real estate agents. In these areas of high competition, agents may include the cost of marketing into their fee, or cover the cost themselves just to gain the listing.

It's fair to say that all bases have been covered, and you probably wouldn't be asking yourself any of those questions. The agent encourages a big spend on advertising because he doesn't pay for it, and the better the result, the higher his commission. The real estate industry is an open and transparent market, in that interested sellers are happy for people to know they are selling, and interested buyers know eaxctly where they have to look to see what's on the market.

Now let's look at selling your pharmacy. Traditionally in the pharmacy industry you sell your business via a broker, who in most cases relies on word of mouth to market it. It might be listed on the broker's website, if they have one, and certain listings are advertised in industry publications which require long lead times prior to being printed, and are limited to frequency of print and circulation.

One difficulty is that pharmacy owners don't want everyone to know that they are selling their business. They're concerned that their staff, customers, and competitors will find out, and it may impact the sale. The pharmacy for sale market is not as open and transparent as the real estate market, and it's often difficult to find out what is on the market, and who out there is interested in buying.

Another issue is that there is no general rule concerning who pays for the advertising. Brokers have never really had to pay to advertise their listings before, and in a way they benefit from the fact that their market isn't as open and transparent as the real estate market. This allows them to manage their clients expectations and leverage of the experience and expertise they have.

Have those 4 questions been answered satisfactorally? Would you feel confident and comfortable that the best possible outcome has been achieved?

What's the solution if your answer is 'No'?

Look for ways to market the pharmacy effectively, to a targeted audience. One way is by listing the business on the website www.practice4sale.com.au

Practice4sale is an idustry specific listing service for people who want to sell their business. The site enables brokers or pharmacy owners to advertise their business for sale, whilst protecting their identity, and the exact location and financial details of the business. Interested buyers, who are registered users can view what is on the market, and request further information on listings of interest. These requests can be made electronically via the site, or by contacting the seller directly. The two parties, the seller and interested buyer, can then engage each other and choose to disclose further information and negotiate accordingly.

Being an independant site, any broker, accountant, advisor, or pharmacy owner can advertise a business for sale, and the site attracts it's audience by marketing direct to the pharmacy community. Since it's re-launch in March the database of registered users has grown to over 4,000 and the level of activity on the siteclearly indicates that it's a 'sellers market'.

It costs $100 inc gst to list a business for sale. A fraction of the sale price, and a fraction of the fee or commission charged by a broker or selling agent.

What do you get for $100?

• a listing on the only website specifically designed to match pharmacy sellers with interested buyers
• access to the database of registered users who are waiting for the right opportunity to appear
• confidence, and comfort that you have achieved the best possible outcome for the sale of your business

Pay for the listing yourself, or insist that the broker or selling agent does. They'll be happy to if it means listing your business. A small price to pay for piece of mind, and an even smaller price to pay for possibly an extra $10,000..........or more!.




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