It’s an age-old adage that first impressions are of the utmost importance. It’s why business people wear suits and why car dealerships keep the cars on their lots shiny and clean. It might seem like basic sales knowledge that in order to sell something, you need to make sure it is ready for that all-important first impression.
Business buyers who come to the business marketplace looking for a shiny, clean business are in for some serious disappointment, and that disappointment may lead some to either give up their business search or continue searching indefinitely.
Businesses, and small businesses in particular, can be ugly monsters. At a cursory first glance, a business that has recently listed might seem outrageously overpriced, have seemingly unintelligible financial records and look like an unorganized mess teetering on the brink of collapse. These terrible first impressions, however, mean that buyers regularly pass over perfectly good businesses just because they aren’t perfect.
Why do they look so bad?
Small business ownership is a tough gig. Owners who are very capable of holding everything together and helping the business grow may not be so great at keeping their books organized or at explaining why they listed the business for the price they did. As a buyer, you want a strong business, so overlooking businesses because the current owners focus more on the strength and growth of the business instead of focusing on neatly curated paperwork would be a very big mistake.
Another major first impression hurdle is the aesthetics – peeling paint, outdated decor, dirty floors – but again the point here is you want a business whose owner focused on the bones of the business itself, not someone who only worried that the place stayed immaculate.
How do I see past the ugliness?
Get some professional help. Business brokers look at ugly (but wonderful) businesses every day, and they can help you as a buyer navigate the shoddy paperwork and stained carpet to see what you really would be buying underneath. When you buy a business, you aren’t really buying furnishings and a sign anyway – you are buying cash flow – so having someone to help you determine what the cash flow looks like for the businesses you find interesting can go a long way towards helping you make a decision.
As you start your business search try to remember that in the business for sale world, it’s not the first impression that counts.
Have you been searching for a business but haven’t found one that doesn’t come across as a complete train wreck? Would you like advice about how to see past the first impression to find great businesses? Please ask us! Leave comments or questions here and we would be happy to help.
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