Selling a Business May Become a Reality Check
Selling is a reality check.
When you sell a business a band-aid will usually get ripped off.
It’s more often than not that a business is worth less than what the business owner thinks it is, unless they are sitting on something that they don’t realize there is a market for, which for most savvy business owners, they have exploited their resources better than most.
To be in business for yourself is a tough thing, so you have done what you can to maximize the resources to the best of your ability.
Everything you’ve done is probably worth millions and millions of dollars if executed properly
Meaning small things too.
Like the name you thought of. Or a client you signed on. Or software and automations you built.
When you look at opportunity cost + the cost it took to build these things + the time spent + the energy and effort, you spent a lot of time and money on your business.
The sad news is that a buyer won’t see any of that. We can convince them all we want, but they see cash flow. They will only pay for the supporting stuff if it is something they were keen on in the first place and saw value of most likely before you brought it to their attention.
You’ll have to come to a realization if you want to sell your business – and, if you’re looking to sell – odds are, you might not have been approached by before, so now we have to go to the market with your offer. Or perhaps you have been approached, but now you want to see where the yard stick is and how that offer measures up to the market.
You can’t google the Rolex or Patek to see what it’s worth in this case. Your business is unique.
So you are looking for a buyer who sees the value in your unique offer.
Buyers are interested, but you will send them material and they are more from a vantage point of – does this fit my criteria. Meaning target acquisition criteria and approach.
Yes, occasionally you’ll get a buyer who is not experienced in the same industry and will generally overpay.
But at the end of the day if those things don’t result in actual cash it will almost always be diminished by a third party compared to what you’re assessing its value as.
So if you are holding on to some figure to try to get back the time, effort, and energy spent, you may never get a buyer to pay you that price for what you have.
So, often times it is a reality check.
That doesn’t mean you can’t sit on a number that is worth it to you, but you don’t want to be upset at a situation where you are waiting and waiting for a very long time for a buyer to come around when you could have had a quick sale.
It comes down to how important the timing of your sale is as much as it is the price.
It’s important to understand what a buyer is looking for and price your business according to your goals.
We can help you understand the dynamics of selling your business including price, timing, etc.
Reach out through call or email.
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Leader in Acquisitions with Expertise in Representing Sellers & Buyers on Deals
Jarbly is a leader in acquisitions with expertise in helping with listings, negotiations, LOI's, asset purchases, company purchases, and real estate purchases. JARBLY has access to high net worth individuals if you are on the sell-side and businesses that may be of interest to you if you are on the buy-side.