You are an accomplished business owner, it’s just that the time has come to move on to the next chapter of your life – so you’ve decided to sell.
Why pay a business broker a commission to do something as simple as sell your business, right?
Well, you can try – but it’s probably going to end as an unmitigated disaster. A disaster that could spell the death of your business, forcing you to lock the doors and walk away with nothing. Here’s why:
In order to sell your business, you need to find a buyer. In order to find that buyer, you need to get the word out that you’d like to sell. So you snap a few pictures of the front of your store, clearly showing the address and post the listing for your business online. You might even go as far as to put a “for sale” sign up. The consequences of this marketing campaign? Your staff immediately knows you are looking to sell, and mistakenly assumes that it means the business is in deep financial trouble. Your entire staff quits, en masse, looking for more stable work – taking all of their regular customers with them. Your customers see your “for sale” sign and make the same assumption that your staff did – that you’re in trouble. They see the demise of your business as inevitable and so they take their business somewhere with a future.
If you manage to find a buyer without your staff and customers finding out – say a word-of-mouth, friend-of-a-friend kind of thing, you might think you’re out of the woods. This buyer seems great, so you start divulging all kinds of proprietary information because you believe they will be taking the helm in the near future. It turns out, however, that this buyer doesn’t have the cash they initially led you to believe they had, and they want you to seller finance an enormous part of the purchase price. Worse yet, you find out they are the brother-in-law of your biggest competitor, and because you never realized you should have asked them to sign non-disclosure agreements you have no legal recourse when they take your “secret sauce” to your competition.
Ok, so you’ve managed to avoid the blunders we’ve discussed so far. You have a buyer who doesn’t work for your competition and your staff is still in the dark. You’ve never written up a contract for a business sale, but you’ve written up contracts for other things so it should be easy, right? Your plan post-sale was to set up another shop that sells something different – but in the same area because this is where you and your family live. Unbeknownst to you, you misunderstood a non-compete clause and just signed a purchase contract that means you can’t open your new shop within 100 miles of where you currently live.
Selling your business doesn’t have to be a disaster or a nightmare. You may not want to pay someone for their help, but you have to think about the cost of a commission this way. Even if you don’t end up in one of the horrible situations we’ve discussed here, selling a business is a full time job. That’s why an entire industry of professional business brokers exists. You need to be paying attention to your business in the very critical time when your current numbers mean getting the most from the sale. You don’t want your business to be suffering when buyers are looking – the amount of money you stand to lose could be enormous. Get the right help.
A qualified and experienced business broker knows how to confidentially market your business so your staff and customers stay in the dark. They know how to spot unqualified buyers and make everyone signs the appropriate non-disclosure forms so you and your business are protected. They’ve helped write hundreds of purchase contracts, and they know when something isn’t right. They’re your buffer during negotiations and your sounding board to help with the decisions you need to make. And if you’ve ever tried to sell a business without one, you know they’re worth their weight in gold.
Get the most from your business sale without your business or your sanity falling apart. Hire the right help.
Are you thinking about selling your business and now think it might not be a good idea to go it alone? Do you have more questions about what business brokers bring to the table? Ask us! Leave any questions or comments and we would be happy to help.
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