How I Sold 2 Businesses In Singapore & 7 Tips To Sell Your Business
With my sale of Streaks n Strokes art studio last week, I have sold 2 businesses in Singapore over the past 2 years. In this article, I share my story of selling Streaks n Strokes - from my attempt to engage a business broker here in Singapore to finally selling it with my own efforts.
Back in 2022, I also sold Hearty Spices, a Turmeric Latte Spice Mix startup that I was running for just 2 years. I also share about my experience selling Hearty Spices here. After analysing my learnings from selling these 2 businesses, I have also came up with 7 tips for those looking to sell their business!
Why I Engaged Raffles Brokers To Sell Streaks n Strokes
Last March, when I found out that I could be migrating from Singapore to Australia within the next 4 months, I was almost “desperate” to sell Streaks n Strokes art studio.
How could I run an operationally heavy art studio business without a physical studio space in Singapore if I had to move to Australia?
Keeping this in mind and the fact that I had very limited time, I started looking for a business broker. I found Raffles Brokers that advertised to me via Facebook.
On a zoom call appointment with me, the sales person verbally communicated with me that they can help me sell the business in a month or two. At least, he gave me the assurance that there was a high likelihood that he could sell my business at or around the valuation given the business was making decent revenue monthly.
I engaged Raffles Brokers who charged me $2000 upfront to do the valuation and then help me sell Streaks n Strokes. Raffles Brokers was also entitled to a 5% sales commission if they found a buyer for my business.
My experience with Raffles Business Brokers
After I engaged their services though, they told me it will take at least 6 months to sell my business, as selling a business is a lengthy process. I decided to wait and see.
They did my company valuation. They valued my company at around $90k at that point of time.
They did the sales pitch deck for Streaks n Strokes.
They listed my business on business for sale portals that anyone could access.
Here are the results they achieved after one year:
0 leads.
0 interested buyers.
No active interest in selling my business.
I always had to chase them for updates.
Well, as an unhappy customer, I decided to request for a partial refund after 6 months as it seemed unlikely they will find a buyer for my business. I was also strapped for cash at that time. So I requested them for a partial refund nicely.
They brought me around in circles telling me to speak to different people in their team and even wait for the outcome.
When they told me they will send me a refund sheet, it almost sounded like they were agreeable to a partial refund. I thanked them and asked them when they will send me the refund sheet.
I realised it wasn’t a refund sheet for them to process my refund as I had misunderstood. Instead, it was a refund request form. I filled it up as per their request praying for the best outcome.
Unfortunately, they simply pointed to “contractual terms” I had signed when engaging them and used these terms to refuse my refund request
I was left helpless.
I tried to explain to them that this guarantee of sale was not promised in writing but the sales person had verbally given me the assurance of a successful sale. I also mentioned I saw little to no progress in them making a sale as they promised.
Raffles Brokers did not reply to me after the above email that I wrote.
In case, you are thinking this is just my story. And it is just Raffles Brokers who are unable to sell most small businesses as they claim they can.
I do not think so.
How Most Business Brokers Make Money
I spoke to many business owners a few months after I engaged Raffles Business Brokers. To my surprise, I found out that almost all business owners had been unsuccessful in selling their businesses with business brokers in Singapore.
Based on this, I realised that most business brokers make most of their money from the fixed upfront payment usually in the 1000s and not the commission from the sale of a business. As such, I am looking to collect feedback from business owners who have engaged business brokers in Singapore here. This will help business owners looking to engage these brokers decide if they want to engage a particular broker.
So if you have a positive or negative experience with a business broker, please fill up this short Google form here. If there are lot of business owners who fill up my Google form, I will publish another blog post with the results of my survey.
That said, I do have hope for business owners looking to sell their business. You can sell your business without a business broker if you are determined to.
And I have done this not once, but twice. Which is why I am writing this article and which is what I will be sharing about as you read the remainder of the article.
How I Sold Streaks n Strokes Art Studio
1. I Set My Intention To Sell in 2022.
In July 2022, I wrote down my intention to sell Streaks n Strokes and the reasons why I wanted to sell Streaks n Strokes. In fact, I made this public on my social media channel.
2. I Shared About Wanting To Sell My Art Studio Business.
I shared with friends and family about wanting to sell my art studio business. I explained that it was not something close to my heart as I personally had no interest or talent in art.
3. I Engaged Raffles Business Brokers In March 2023.
When I found out that I may have to move to Australia in late March last year, I engaged Raffles Business Brokers to sell my business immediately.
Raffles Business Brokers was unable to sell my business as they had verbally assured me they would.
However, they did my company valuation and valued it at about 90k. So I knew what my company could be worth provided it continued to generate the revenue it was generating.
P.S. You do not need a business broker to do your valuation. A qualified accountant would be able to do it for you.
4. I Actively Networked & Looked For Solutions In Entrepreneurship Communities.
When I found Raffles Business Brokers were nowhere close to selling my business, I started sharing about wanting to sell in entrepreneurship communities I was a part of.
In a networking event at Launchpad Singapore, another business owner suggested I could explore alternatives to selling my business such as finding an operations partner.
The idea gave me hope as the thought of selling my business with the help of business brokers became a far fetched dream.
5. I Made Do With An Alternative Solution
Considering the limited timeframe I had, I brainstormed and listed all my past contacts that I could reach out to and explore selling my business or working together.
I contacted another art studio owner whom I had explored collaborating with before (but did not proceed). Over a cafe meetup, we decided to work with each other to tap on each others strengths and form a win-win collaboration.
He would provide me an art studio space (which he already was renting), manage facilitators required to run the events and even procure all materials required for art events.
On my end, I had to take care of the marketing and sales aspect of the business from generating leads using SEO to converting these leads into paying clients. We made this collaboration work through a revenue split arrangement where I would take 25% of the revenue generated and he would take the remaining 75% to run the events and procure the materials.
6. I Generated Consistent Leads & Sales
As I generated consistent leads and sales through SEO, for companies looking to organise art based corporate team bonding activities in Singapore and parents organising kids art parties, the sales revenue of my operations partner increased manyfold. The consistent sales Streaks n Strokes was bringing in caught the eye of one of my partner’s team members (@ellalinaart) who was a passionate artist herself.
7. I Made A Quick Decision When I Received An Offer In 2024.
While I was struggling to manage the leads coming in for Streaks n Strokes through SEO along with running SEO with Senthil actively, she dropped me a message with a reasonable offer to take over Streaks n Strokes. I had not expected this offer that came out of the blue. While the offer was far off the 90k valuation that Streaks n Strokes was valued at, I still decided to proceed with the sale at a fraction of the business valuation.
Why I Proceeded With The Sale Of Streaks n Strokes
The owner of ellalinaart was just about 21 years and the fact that she had a 5 figure sum ready to take over the business along with a studio she could operate in) was impressive.
I sold Streaks n Strokes to her at a massive discount because:
Ellalinaart was a young artist passionate about art! And who was helping to run the art studio herself.
After fighting through keeping Streaks n Strokes alive during the pandemic and following the sale, I could be 100% debt free for my businesses.
I could still take back some profit from the sale.
100% of my time, mental energy, effort and work could finally go into building SEO With Senthil - the business that is more aligned to my interests and passion. It would free up my time for working with my clients on their projects too.
I wanted to allocate more time for my 18 month old son and family.
All in all, I am happy with my sale and to be taking back invaluable business experiences from running Streaks n Strokes for the last 5 years.
How I Sold Hearty Spices
Back in 2022, I sold Hearty Spices, another company I ran but at a much smaller scale and time period than Streaks n Strokes. For this reason, I did not engage a business broker for 1000s of dollars and I am thankful for this.
1. I Set My Intention To Close Down or Sell in late 2021.
Again, I set my intention to sell the company along with my reasons for wanting to sell. Often times, the WHY behind your goal is more important than HOW you will achieve the goal. If your WHY is strong enough, you will figure out how.
2. I Listed My Business For Sale At A Fair Price
As I knew my company was less than 2 years old and solely focused on selling 2 variations of a traditional and healthy turmeric latte spice mix, I did not expect too much money from the sale. I listed it at a low 4 figure price point on Shopify Exchange Marketplace that even people starting out in business would be able to afford.
Shopify Exchange Marketplace was decommissioned and has closed down since November 1st, 2022.
3. I Shared About Wanting To Sell Hearty Spices Or Close Down
Again, I shared about wanting to sell Hearty Spices or close it down entirely. I remember I was feeling a lot of overwhelm managing 2 businesses entirely on my own (during that period) as my wife had pulled out of the business to focus on her career.
4. I Highlighted Our Best Performing Months On Social Media
I used the data I had gathered from Shopify and shared results from our most profitable months. Along with the data, I shared my business for sale listing on my social media channels and requested friends to share around my post.
5. I Was Open To Negotiation For A Quick Sale
When I received a lower than listed 4 figure offer for Hearty Spices, I was agreeable to offer a significant discount but only for a fast transaction and payment. This expedited my sale of Hearty Spices and I completed the handover process in the following months.
My 7 Tips To Sell Your Business
Based on having sold 2 businesses successfully, I have 7 useful tips for business owners who are thinking of selling their business.
1. Set Your Intention
I did this for both businesses I have sold. I wrote down clearly the reasons why I wanted to sell my business and when I will sell my business by. Also write a plan of how you will go about finding buyers if possible (some ideas below).
Most importantly, remember that selling a business is a lengthy process. So make sure you give yourself ample time to sell your business.
2. Don’t engage business brokers that charge upfront fees
Unless you have a lot of spare cash and can accept that engaging a business broker (in high likelihood) may not lead to the sale of your business, don’t engage business brokers that charge high upfront fees.
You can put the money to good use elsewhere in your business.
If the business broker gives you the assurance that they are confident that they can sell your business, offer 10%, 20% or even a 30% sales commission (but without paying a high upfront fee of over $1000.) They will take up your offer if they are as confident as they make it sound.
And because selling a business takes A LOT of work, this higher sales commission is very much deserved if they do manage to sell your business.
3. Engage an accountant for your business valuation
If you decide not to engage a business broker for the reasons above and want to work on selling your business on your own, engage an accountant to do an approximate company valuation for your business instead.
This should cost you no more than $500.
4. List your business for sale
There are many portals in Singapore where you can list your business for sale. You do not need a business broker to help you list. BusinessForSale.sg is one example but they do charge a monthly listing fee.
5. Be active on 1 social media channel
I am not an influencer with tens of thousands of followers. And neither am I posting about selling my business every day.
Yet I found buyers for both my businesses through personal contacts. It is because I am always quite active on at least 1 social media channel. In my case, my most active social media channel was my Facebook page here.
So choose your most active channel and post consistently there.
You can share about selling your business occasionally as I did. But do share personal and other business owner relevant stories and tips too. Even if building your brand on social media does not help you find a buyer for your business, it may help you in other ways such as landing a customer!
6. Join local entrepreneurship communities
While posting on your social media about selling your business is great, some people do not have many like minded friends, aspiring entrepreneurs and business owners in their social networks. Others may not want to share about their efforts to sell their business to their close personal network of friends and family.
For these people, tapping onto local entrepreneurship communities in Singapore may be a great alternative.
Launchpad Singapore is one local entrepreneurship community that I have been a part of that has helped me:
Meet like minded people in Singapore
Grow my network of business owners
Tackle business challenges when I encounter them
Survey business owners when I need their inputs
Find customers for my business
While I do pay $47 a month to be a part of this community of entrepreneurs, I have received way much more value by being a part of this community. Just be sure not to always be looking to receive but give loads of value to other entrepreneurs inside the community too.
7. Be flexible and negotiable
If there is one thing that helped me sell both my businesses which I had an intention to sell (Hearty Spices in 2022 & Streaks n Strokes last week), it was that of me being flexible and negotiable on my selling price.
Or more importantly, understanding demand and supply and not just being rigid on selling it at my “business valuation”. If you don’t receive much offers after trying to sell your business for a certain period of time, then you must be willing to negotiate down or be flexible on the money you think your business deserves.
Remember.
Once you reject an offer to buy your business, that offer may not come back again.
That said, make sure the pros (benefits) of selling your business at a certain price outweighs the lower price offered.
For me, it wasn’t just about the money. But about wanting to focus all my effort, time and energy into growing and serving my clients for SEO With Senthil and for freeing up some time to spend with my family.
Bonus Tip: Contact Competitors or Complementary Businesses
Brainstorm other businesses that can benefit from taking over your business. This can be a weaker competitor like it was for the case of my art studio. Or it could even be a stronger competitor who wants something your business has that their business doesn’t.
You can also sell your business to complementary businesses. For example, my art studio could also have been sold to a corporate team bonding company offering a wide range of corporate team bonding activities.
After you come up with a list of competitor or complementary businesses who may be interested in buying your business, you need to reach out to the owners or decision makers of these businesses.
Again, joining business networking groups locally such as Launchpad Singapore which I joined or other business networking groups like BNI Singapore may help you do this more easily.
Business Broker In Singapore: No Upfront Fees
While writing this article, I stumbled upon a business broker in Singapore that claim they not charge businesses any upfront fees. I felt it may be useful for business owners needing professional help to sell their business in Singapore, so I decided to share about his service here:
Let me know if this service is legit if you do contact Bradford, Lim & Associates above.
And let me know if you found this article useful.
Best wishes in selling your business!
If you have had a positive or negative experience with a business broker in Singapore, please fill up this short Google form here. If there are lots of business owners who fill up my Google form, I will publish another blog post with the results of my survey.
