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Why you’ll always get ‘unders’ when selling your business through a broker

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Why you’ll always get ‘unders’ when selling your business through a broker

By , November 2, 2018
Unders-Blog

If you’ve ever put a business up for sale and found that the offers you received were far lower than your expectations, you’re not alone. It’s symptomatic of the fact that the business broking model is broken. Lots of businesses never sell. Those that do take far longer than expected. Using the “list it and leave it” method means most owners don’t get the value they deserve.

According to the Exit Planning Institute’s Readiness Survey (2017), 75% of business owners “profoundly regret” selling their business 12 months after the deal.

The old-fashioned approach of putting lipstick on the pig and advertising it widely to “flog it off” as quickly as possible is done and dusted. It doesn’t work for anyone except the broker who charges excessive fees to do very little! 

The key to getting this right is simple: preparation and time. Previously, I worked providing detailed CGT advice to accounting firms when their clients sold a business, writing over 200 letters of advice. Over 199 of these were bad exits – wrong buyer, wrong price, wrong structure, no documentation, no business systems, no preparation and not enough time devoted to maximising the value of the business and achieving a successful exit.

Find out what your business is really worth.

Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.