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