The decision to sell your company is an extremely important event and you need to approach it properly to have any chance of achieving success.
Poor Preparation: It is a subject that is talked about often, probably because it is so often ignored. Too many Sellers come to the process woefully unprepared. Financial information is lacking, agreements expired or non-existing, lack of marketing or ongoing sales plans, marginal employees, too many open-ended items, etc. Time is wasted gathering information that should be readily available and which the Buyer expects to be in place in the normal course of business.
Poor Timing: As the saying goes, “timing is everything”. Selling one’s business at the proverbial top of the game is almost impossible, but selling on the upside is certainly better than selling on the downside. There is another side to timing. The owner is 63 years old and plans on retiring when he is 65. Besides, business is really good right now so why sell? Because timing is everything and the business is better than ever, it will command a much higher price right now. It takes 6 to 12 months to sell a business and waiting may mean accepting a much lower price – the time to sell is now!
Proper Representation: Make sure you utilize the professional services of an experienced Business Broker/Intermediary. They know how to value, market, negotiate and complete often complex transactions. They are an important part of your team, which should include a CPA and Lawyer who are very experienced and actively involved in business transactions.
Not in Agreement: Too many transactions fall apart because family members, partners, or stockholders are not in agreement about the details or of actually selling the company. Selling a company is often a long process involving Professionals, Buyers, etc. who invest significant amounts of time. Agreement is paramount prior to even considering selling the company.
Not Using Your Sixth Sense: The Business Owner built the business using his or her own judgment or sixth sense. Another term is “gut feel”. It is what probably has made the business, and its Owner so successful. The same is true when selling. Is it the right deal, the right Buyer, the right deal structure, etc.? Sellers have to remember to use their sixth sense that served them so well in the past.
Kevin A. Nery, CBB, LCBI, M&AMI is a Certified Business Broker, Lifetime Certified Business Intermediary, Merger and Acquisitions Master Intermediary and a Consultant with over 40 years of business experience. He is President of The Nery Corporation and Coastal Business Brokers. Mr. Nery is currently a member of the Board of Directors and Treasurer of the New England Business Brokers Association, NEBBA. a Member of the New Bedford Economic Development Council, One SouthCoast Chamber, and was a Featured Columnist in the monthly “South Coast Business Bulletin” for many years. In addition, he has been a Guest Speaker on WBSM 1420 AM’s weekly show, “Money Wise,” is a Contributing Intermediary with BIZCOMPS© Completed Business Sales Statistics, and has been named to the Hall of Fame for Pratt’s Stats® Sold Business Database. He may be contacted at Coastal Business Brokers, 700 Pleasant Street, Suite 330, New Bedford, MA 02740; Telephone: 508-990-9800 • email at firstname.lastname@example.org • www.coastalbizbrokers.com