American Business Brokers - February 2021

American Business Brokers - February 2021

American Business Brokers & Advisors Founder & President PROFESSIONAL INTERMEDIARY & MARKET MAKER FOR PRIVATELY HELD COMPANIES Author of ‘The Art of Buying and Selling a Convenience Store’ & ‘Hidden Wealth’ Involved in the Sale of 800+ Businesses Advisor • Consultant • Speaker

FEBRUARY 2021

8 Common Mistakes WWW.TERRYMONROE.COM Business Sellers Make

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If (or when) you decide to sell your business, there are certain mistakes you should avoid if you want to have a successful transaction and get the most money possible out of the deal. After selling over 800 businesses, I decided to list the eight most common mistakes owners make when selling their business. You try to sell it yourself. There is a reason pro athletes and actors have agents — because they get more money and better terms when they hire someone to negotiate for them. Likewise, you won’t get as much value for your business trying to sell it yourself without the necessary experience. Attempting to sell your own business will devour your time. So, instead, focus on running your business and leave selling it to a professional. You are too sensitive about your business. Nobody likes to hear they have an ugly baby, and the same is true when you are selling your business. Regardless of how hardened you think you are, you might potentially take negative comments about your business from prospective buyers personally. The solution is to get an intermediary to translate the buyer’s comments into requests that will be easier to stomach. You don’t know how to arrive at fair market value. Having an unrealistic idea about the value of your business can cause the deal to fall through. Learn what businesses like yours are selling for in the current market, and

never believe anything you read in the trade magazines about valuing your business. You don’t know how to recognize a qualified buyer. Different businesses require different kinds of buyers, and different buyers will pay different amounts for a business. You need to know which buyers are paying the most in today’s market because buyers change with the market. You probably don’t know where to look for the right buyer. Finding the right buyer for your business isn’t as easy as running an ad in a trade magazine or newspaper and seeing who contacts you. As a seller, you want to know who really has the money and whether they are serious. Are they cherry-pickers or low-ballers? Do they use the old bait-and-switch technique? Remember, time is money, and buyers are generally working on your time and your money. You forget that selling a business is a process, not an event. Selling a business involves a structured process that takes time — generally 6–12 months from conception to closing. It is a very detailed process that not all sellers can weather without guidance from a trained professional. You forget to assemble the right team to get the job done.

go well. The right team will probably include an attorney with experience overseeing business transactions, an accountant who understands the tax system and looks out for your best interests (even if it means losing your account), and an experienced intermediary who has working knowledge of your industry. You aren’t committed to selling. Assembling all of the >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6

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