Fifteen years ago Phil and his wife Beryl sold their convenience store they had owned for ten years and bought an independent supermarket in the south eastern suburbs of Brisbane.
Seven years later they bought another local supermarket and developed both businesses considerably, including bringing the second one into the same supermarket group. But, as any supermarket owner can verify, running one supermarket is a full time job, running two is hard work – Phil conservatively estimates he was spending 60 hours a week working, and he realised he wasn’t getting any younger!
They had not really contemplated selling either business, as they were both running well, until his daughter, who had been running their first store, decided to go on a five month holiday, and they were faced with the task of finding a temporary replacement manager. At the same time they had been planning to go on along holiday themselves, which just complicated matters further.
Enter Aussie Supermarket Brokers (ASB) Sales Specialist Grant Somerville. Grant and Phil had known each other through the supermarket world for a long time, and when Grant joined ASB, he’d make a point of popping in to see Phil and Beryl once or twice a year to see how they were going.
In one of these conversations with Grant, Phil realised that one option that might solve not only the immediate holiday issue, but also his heavy workload, was to look at selling one of the stores. And although he knew Grant, he nonetheless did his ‘due diligence’ in deciding how to sell the store and had a look at a couple of other brokers’ sites on the internet. Aussie Supermarket Brokers were far and away the biggest supermarket brokers and also seemed to him to be the most organised in their approach, so he spoke again to Grant to arrange to have his business
listed for sale.
“As soon as Phil and Beryl indicated they were ready to sell their business, we started to walk them through what would be involved to prepare the business for sale, including the documentation we would need to put together on their business.” said Grant.
Phil adds “Getting all the necessary paperwork together was hard to do while I was continuing to run the store on a day-to-day basis. ASB needed everything, right down to the contract for our ATM for example – everything had to be fully documented. But this attention to detail certainly paid off.”
The business was listed for sale in April, a deposit was paid, price and contract terms were agreed 19 days later and the sale contract went through in November. The purchasers needed to sell some property to complete their purchase and the sellers were happy to keep trading and generating profits secure in the knowledge that they had a definitive end date and an unconditional contract within 30 days of signing..
“Going through Aussie Supermarket Brokers made the sales process a lot easier. First of all of course, we didn’t have to go looking for buyers ourselves, ASB handled all of this.” said Phil. “ASB also looked after all of the advertising, and having Grant on hand to guide us through the process and occasionally prompt us to keep the process moving along was a huge benefit. As you can imagine, it can be a little stressful selling the business you’ve owned and worked in for so many years, but Grant kept us informed of progress with a weekly email report and was in constant contact with us, which was a real help.”
“Ultimately Phil and Beryl’s sale process was successful because of the combined effect of their well presented business and the time they took with us to prepare the documentation and understand the process.” said Grant.
Phil and Beryl, and their daughter ended up taking their holidays, and now they’re back Phil has been able to reduce his working hours from 60 a week down to a more reasonable 30-35 hours per week. And he gets a three day weekend. Great outcome all round.
“This business sold for 14.76 times weekly turnover ($42,000 including GST per week). The PEBITDA multiplier was 3.02 times. This store went to contract quickly for several reasons:
- All financial documentation was available when the business was placed on to the market
- The business had strong profit and 26.7% GP
- The location was within 25 minute drive of Brisbane CBD
- The store was well presented
- The business had a long lease and reasonable rent (Rent plus outgoings was 4% of turnover)
- ASB had a group of interested buyers who met the criteria for this business”.
“Such a quick sale is a rarity in the current marketplace but does demonstrate that a strong performing business with the right attributes is always in demand”. Said Grant Somerville.