Selling Your Business Not to Donald Trump
Donald Trump has bought many businesses in his career. He has sold many as well. Most business Owners looking to Sell a Business have not sold a business before. Likewise the majority of those that buy a business have not bought a business as well.
Like with most statements there are exceptions to the rule.
There are many Strategic Business Buyers that make multiple Business purchases within a year. Sometimes a business owner had sold a previous business as well. But from all my experiences involved with business buying and business selling over the last 25 plus years the majority of business sellers are selling a business only once maybe twice in a lifetime.
As a prior business owner and a current business owner and a buyer of multiple businesses, and a Business Broker in South Carolina and Florida I recognize the benefit of hindsight. We all know in running or growing a business, we make mistakes. We dont know it all. But we know more than we did 10, 20 or 30 years ago. How good can one be when doing things for the first time? Very often you just don’t know what you don’t know.
Buying or selling a business is not a perfect process. Things can and will go wrong during the process of buying a business and selling a business. Things can and will go wrong while running a business.
I have never witness a Perfect Business being sold by a Perfect business Seller to a Perfect Business Buyer.
The goal to buying or selling a business for the 1st or 2nd time in ones life should be to mitigate your situations of “I didnt know that”. Surround yourself with people that you can trust that have been through the process before. Ask questions. Seek answers .
Below are some common misconceptions I have come across from both business buyers and Sellers.
- Business Seller- ” I want 100% of my Selling price to be paid at closing. I do not want to offer any financing”- To that I say- We All Do. We all want to be paid completely at closing-” How do I know Buyer will pay me”. Buyer will say, “what assurances do I get that this business is what I think it is. “Without looking at sales of businesses over last 5-10 years I would venture to say that 80-90% or more of all business sales involve financing from SBA Lender, Seller, or other 3rd party financing. -As a business broker I seek to secure “SBA Lender Prequalification” for a business I am representing to sell. The quantity of Buyers willing to pay 100% cash for a business is minimal. The amount of prospective buyers that are willing or in the position to pay a down payment and finance the balance is significantly greater.
- Business Buyer- “I’m buying a business, so either the Seller meets all my demands or I walk.” Normally a business Sale involves some “give and take”.
- Business Seller- “Let the Buyer make an offer then I will provide that information.” – Certain information is needed in order to make an offer. Not all request are reasonable- the responsibility of an advisor is to “advise” on what may or may not be a reasonable request.
- Business Buyer- I found the right business, but I am going to wait to see if they reduce the price.- Finding the right business is not an easy task. If I find the business I am looking for, I am going to pull the trigger or else deal with the remorse of missing out on this opportunity. I’ve done that before, and wont again.
So what are some key take-aways when looking at buying or selling a business for the 1st time?
Know what is important to you. Know your timing. Seek advice of trusted advisors. Ask questions. Measure twice, cut once. Mistakes can and will be made. Not Doing your best to mitigate those mistakes could be your biggest mistake.
For More information on buying or selling a business, business value points or transition/exit strategy please feel free to contact me Scott Messinger at (864) 210-8226 or (239)770-2421 – Scott@GatewayBusinessAdvisors.com