I recently had a confidential conversation with a landscaping business owner about selling his business on his own. He has two friendly competitors that have indicated an interest in buying his company. He has a small but profitable business that he has elected to keep at the $1.5M annual revenue number. This size of business generated the kind of income he wanted and allowed him to “have a life” with his kids growing up. He explained that now that the kids are finished with college and don’t want to enter the business, he wants to exit and try some new projects he has been thinking of.
He had done quite a bit of research on his own and started initial discussions. He wanted to know what I thought about him doing this on his own. Here are a few points I asked him to consider.
- It takes time. I asked him if he had plenty of extra time to learn about the process and then manage the project so it stays on track to close. Most businesses this size require the full-time attention of the owner to keep things running smoothly in the business. Taking on this transaction is like another full-time job.
- Keeping things confidential is important. It is difficult to avoid word getting out to your clients, employees and competitors if you are handling your own sale. If you are taking phone calls from potential buyers, your accountant, attorney, appraisers and others that are unusual, your employees will notice. And in the absence of information, employees tend to anticipate the worst.
- Negotiating the best price and making the deal require a skill set. If you haven’t been through it before, arriving at the best price (which I define as the most you could actually sell the business for) can take quite a bit of bargaining. Even if you are working to a win-win, time and patience are required.
- There is an emotional factor that you shouldn’t ignore. With the right advisor, you will have a coach that can anticipate how and when these issues will arise and how to deal with them from experiences with similar owners.
There are many other factors to consider when making this decision and sometimes a deal can be made by a seller with his attorney and accountant.
If you would like to discuss your situation on a confidential basis, call Alison at 224-688-8838 or email me at firstname.lastname@example.org.
We’re here to help you harvest your potential.