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What you describe as your business can be very different from what an outside person might describe because, as the saying goes, “Beauty is in the eye of the beholder.”
Do you care what other people think about your business? We all agree that it is important for your community and customer base to see your business as an asset to them. After all, you cannot exist without them.
How about another business owner? A bit of pride most likely arises and we would all say that we hope other business owners look at us a serious and successful entrepreneur.
Of course, there is always another part of us that says, “I really don’t care what anyone else thinks of me or my business.” Yet, for all of our independent spirit, our future is totally dependent on what people think of our business.
Why you did it
When you started your business, you did so for a variety of reasons. Maybe you needed to provide for your family. Perhaps you were of the independent type who needed to do things your own way. It could be you wanted the freedom that making your own decisions could bring.
And now? You may have owned your own business a few years, or perhaps many decades. Looking back, you have had good times along with the bad.
But as with all things, change happens. And you decide to sell the business.
Once the decision is made, you contact a business broker, someone you are confident will value your company fairly and get you top dollar for all the hard work you have put into the business.
The first month it’s been listed for sale, your broker said three people asked about the business. Your broker also placed a call to an owner she knew was looking for a new opportunity, but so far hasn’t heard back.
Several months go by, and you have had several people ask for an ND, or non-discloser, which provides them with your business location, name of your business and some pertinent details. So far, no one has asked to meet with you.
But then things get interesting. You receive a serious inquiry and the potential buyer wants to meet.
You meet, discuss details, have another meeting, and then get an offer. It’s less than half of what you are asking. Is the broker at fault? Maybe, maybe not. But now you are frustrated and are wondering if you will be giving your business away for pennies on the dollar, instead of the money you were counting on for a nice retirement.
Then out of the blue, with one day left on listing agreement, your broker said that the buyers who offered less than half wanted to meet again and have an open and honest meeting, hoping you can come to an agreement.
You do not really have a lot of hope, but agree to the meeting. Without knowing it, this meeting was about to change everything.
Eyes of the beholder
Your broker said that the people would like to explain fully why they offered you so much less than you were asking. They are prepared to give you a new offer, but are asking you to listen to them and not necessarily negotiate. You are curious.
The potential buyers are named Mary and Sam. You might remember Mary, as she sold commercial carpet cleaning services in another city before moving on. Now, she wants to run her own company. Her husband, Sam, has some experience buying and selling businesses, although he’s never dealt with the cleaning industry until now.
With your approval, they begin to talk to you about their system for placing a value on a business. Not just your business, but any business.
Mary thinks your business is solid and Sam only looks at businesses that can be improved and sold for a profit.
The conversation then turns to questions, and the first one is, “Where do you stand right now?” After some hesitation, you aren’t entirely sure of how to answer it, but you do know that, in your eyes, your business is profitable and worth quite a bit. In your eyes, it is worth much more than they are offering.
Mary and Sam need some convincing. It seems that the value of your business is based on the “eye of the beholder.”
Next month we are going to find out what Mary and Sam know that totally changes your mind on the value of your business.
Fred Geyen is president of the Geyen Group (www.GeyenGroup.com). His background includes commercial product sales and program development for residential, commercial and disaster restoration with ServiceMaster. He has a Leadership in Energy and Environmental Design Accredited Professional (LEED-AP) designation and is on the board of directors with the LMCCA. Geyen can be contacted at (612) 799-5111.