Small business owners are usually very good at what they do. They may wear several hats in their business and engage across most functions of their business, often multitasking and working hard long hours. It is natural for business owners to know their business really well. As a result, when it comes to selling their business, business owners assume that they can get the best results. Business owners share some common myths about selling through business brokers. The top 3 are discussed below.
1. I know my Business and Industry best.
Most business owners assume that brokers do not know their industry and business well enough. The fact is that brokers are in the business of selling businesses and they do have a lot of experience in selling various types of businesses in different industries. As business brokers, we come across all types of businesses in all types of conditions and we can help position your business in the best possible way. No two businesses are the same, however the industry may be going through a shift (i.e. offset printing versus digital printing). As brokers, we know the benchmarks and the key performance indicators across industries. We know the multiples that apply for various industries based on other sales that are happening in various industries. We are able to apply all these and other industry patterns to your business while looking in on the outside with a unique perspective.
2. Business Brokers don’t add value.
Business owners feel that all brokers are the same, do not take their business sale seriously and don’t work hard enough to get the best outcome. As boutique brokers, we do not have a hundred listings on for sale. We believe in quality over quantity and work selectively with our listings. We are highly focused on every listing and work tirelessly to get the most suitable buyer with the highest possible sales result. We guide our vendors with realistic appraisals for their business; we network with our database of buyers and qualify and reach out to potential buyers that may see a good fit with the business. We negotiate very hard to achieve the best possible sales price for our vendors. This is possible as we take the emotion out of the sales process. We manage the entire process extremely professionally for our vendors and this allows our vendors carry on with running their business as usual without the added stress of the sales process.
3. Why pay when I can do it myself?
As a result of the first and second myths listed above, business owners think they can sell the business themselves and save on brokerage fees. The internet has made it easy for business owners to directly reach out to buyers. Not many business owners think of a sales strategy beyond this. There is a great danger of diluting your business value if the business is not correctly marketed for sale. Another pitfall is that business owners do not think of confidentiality of the sale, and how it impacts their financial privacy and their marketplace be it competitors, staff, suppliers and customers. When we undertake a business sale, we ensure absolute confidentiality in all aspects for all our vendors. We make sure that businesses sold through us are realistically well priced, well marketed, and we ensure that the marketing is targeted to the right audience. We use industry leading websites and marketing tools to ensure our listings stay fresh and reach out to right buyers. A poorly marketed business for sale stales very quickly and the longer it stays unsold, it creates doubts in the minds of the buyers, thereby depreciating its business value. We negotiate hard for the best outcome for our vendors. More often than not, the sales price negotiated by us will be much higher than what business owners could achieve privately.
Some of the vendors who come to us have gone through the process of unsuccessfully trying to sell directly before they come to us for help. Vendors who tried to sell directly have lost the most precious commodity during this process – Time. Lost time which they could have used to quickly moved on to the next phase of their life, lost time which is an opportunity cost for a new business, career move, travel or lifestyle change.
These are the most common myths that some of our vendors have had about selling their businesses through brokers. If, as a business owner, you are looking at moving on to the next phase of your life, and would like to have an obligation-free chat with us on how we can add value to the sale of your business, please contact us.
Sundeep Sapra CAR REIV