By background, I am a CPA (no longer licensed). I spent 5 years in public accounting and 5 years as controller in communication industries. Then I moved into consultative selling – 6 years in executive search and 10 years in architectural product sales.
In 2000, I started to develop a business plan to pursue angel funding for my own internet creation – yourleaguestandings.com. It was great idea but the internet crash of 2000 ended that dream.
So, I entered the world of business brokerage – a perfect fit for my accounting/financial and consultative selling skills. Business brokerage is a tough gig. Because it is not stressed nearly enough in brokerage training, it took a while to learn the key to success – managing seller’s expectations.
Far too many business brokers fail to help their client (seller) understand the obstacles they face and fail to set realistic expectations. As a result, most owners face huge obstacles to selling their business and have unrealistic price expectations. Under such conditions, most businesses won’t sell, and if they do it’s a painful process for everyone involved (the broker, the seller, buyer candidates, families, lenders, and advisors) as owners slowly reach the realization that they will have to compromise considerably beyond their expectations to close a deal. That is one of the reasons only about 20-25% of small businesses ever sell.
In my latter years in business brokerage, I sold about 90% of the businesses I listed. But, because they did not meet my criteria for readiness or salability, I only listed about 1 out of 20 businesses I evaluated. Isn’t that sad? I had to disappoint and lay the bare truth on about 19 of every 20 owners. I informed them of the obstacles they faced that precluded salability, made suggestions on how to overcome them, and provided recommendations to increase profitability. But a one-hour follow-up meeting to an evaluation is insufficient time to provide a full education on how to prepare to exit your business.
If only owners realized the need to plan for the sale of their business ….
When released, I’m very hopeful that “How to Plan and Sell Your Business” will enable other business brokers to also sell 90% of their listings, but more importantly, I’m hoping that 25-50% of the businesses they evaluate will be in a state of readiness and salability (with obstacles conquered).
Connect with me and view my profile on LinkedIn.