In our “do it yourself” society, if there is a perceived way to save money by doing things ourselves few of us can resist. That explains why I built a deck on my house, fixed my jetski and unsuccessfully tried to repair my computer hard drive. Something’s are best left to the professionals like cutting your hair, dental work, tax returns and selling a business.
People invest mind, body and soul for 10 to 20 years to build a successful business, and then when it comes time to harvest their profits some choose to “save” the commission fee by selling it themselves. Often people don’t realize that a qualified business intermediary, on average, sells a business for 20% more than a “by owner” sale. (International Business Broker Association Journal, Volume VIII, Number 1, 1998) Another real risk of improperly preparing and marketing a company is that the business will never sell and have to be liquidated.
Recently there was an excellent survey done by T. Leverette ranking the various reasons business owners hire business brokers.
|1. Brokers know how to sell businesses; most sellers don’t||20%|
|2. Confidentiality preservation and knowledge of what/when to show buyers||16%|
|3. Seller doesn’t want to be distracted from running business||16%|
|4. Access broker’s database of potential buyers and investors||9%|
|5. Maximize price buyers will pay for the business||9%|
|6. Broker understands and can depersonalize negotiations||7%|
|7. Owner does not know how to find buyers||7%|
|8. Prepare owner to sell and prepare business for sale||7%|
In golf there is a special word used to describe getting a second chance. It’s called a “mulligan” out on the fairways. Many things in life allow for mulligans, like painting a room the wrong color or burning dinner. But something’s only allow one bite at the apple like surgery, lawsuits and selling your business. Ask yourself if the decision you’re making permits a mulligan or if the decision is final? It’s your life. Play the cards you are dealt wisely.
Edward Valaitis – Certified Business Intermediary (CBI) and member of IBBA (International Business Broker Association) and Business Brokers of Florida. He has more than 26 years of extraordinary success building, managing, and leading commercial banking, accounting firms and consulting firms. Raised in an entrepreneurial family he takes the responsibility seriously to help business owners realize their dream and exit on their terms. 800.975.2114 www.EdisonAvenue.com