I was with a Client today and he is contemplating selling his business. He has started negotiations with the potential buyer and has made a few major mistakes along the way. He felt that he had an advantage with the buyer because they would think he didn’t know what he was doing and would let down their guard.
My experience with buyers is just the opposite. When a buyer sees a seller who is not represented by pros, the buyer knows they have an advantage. It doesn’t matter how good the advisors are behind the selling owner, it’s the negotiations that happen face to face where the deal is made.
I’m never sure why owners don’t want to bring intermediaries in to represent them in the beginning. Sometimes I think it’s the owner doesn’t want to spend the money and sometimes it seems to be because they don’t think they need help and are able to handle the transaction themselves.
Here’s the important part. You will sell your business once or twice in your life. The buyer of your business often buys at least that many businesses every single year. If you want to have a chance to get a fair deal out of the sale of your business, you must hire someone who is competent to represent you from the first conversation. The amount of money you pay your advisors will come back to you many, many times over.
Josh Patrick
Filed under: For Business Owners
