Nearly all advisors tell you to hire professionals. The truth is, if I hired a professional every time I was told to do so, I would have no home, no business, no money, and no idea how to do anything myself. You are a business owner. You know how to do many things yourself that were once frightening. The hardest thing of all to learn is to stop doubting yourself. If you have a reason for hiring experts, then hire them. Otherwise, do what you always do – research, plan and execute your plan and be willing to accept the consequences (may be substantial) of your mistakes (may be plentiful).
There are two sides to this lesson on experts. Even highly recommended, expensive, so-called experts can run amuck and leave you holding the (very expensive) bag. With businesses, we became somewhat expert ourselves,
helping our franchisees, so we typically have not used brokers and attorneys. With residential, we always bought through a realtor and sold on our own, until recent years, living in a smaller and slower moving market, we need a Realtor. Today, you have access to Internet tools to help you reach the market, but if sales is not your profession, you don’t know what you don’t know. You probably lack the skills to pull it off, and you cannot reach the serious buyer who has moved beyond kicking virtual tires on the internet and is working with a professional broker.
Research beyond testimonials. Know why someone is so great, what do they do that is special, or that has really solidified trust. I have a realtor I adore; who has consistently earned our trust and respect. Her commitment to
confidentiality, having a really good poker face and always being honest to a fault, has earned her our enthusiastic referrals. Beyond a realtor who has sold a number of businesses, you may or may not, need an attorney. I know it sounds like the start of a good joke, but how do you make friends with an attorney? You are not looking for friends; you’re looking for expert advice. Having them read a contract to make you feel better is a waste of money. What are your specific questions? What are your specific goals of the contract? They can tell you the contract is fine, but “fine” for what?! Find an attorney who will interview you, learn what you want and help you express it in legal terms.
You’re selling a small business, not IBM. That said, it may still be complex for you, and your attorney’s job is to be patient and work until you are comfortable. If your business sale included patents, complex real estate, etc. then obviously, you want a specialist.
I promised to tell you three simple secrets and the common thread of successfully selling small businesses. First, you need to know what you want. I mean what you really want. It is not about the money. It is never about the money. It is about what you want to do with the money. It is about the freedom you want. It is about the relationships that may be suffering, or the stress that is killing you, or about more interesting ideas. All these things have a value that is greater than the value of keeping your business. If keeping your business, is keeping you from being happy, give the damned thing away. If you think you cannot afford to take less money, think how much money you are not making at your next career, and how much health, happiness and harmony can your money buy anyway? Right, none!
Next, find out what the buyer (or likely buyer) wants. An absentee investor will look at your business differently than someone looking to buy a job or a competitor who wants only to buy your customers. Each buyer type would pay a very different price for your business. Design your listing accordingly and be prepared to accept or decline, but be aware that what seems fair to you has nothing to do with what is fair to the buyer. Forget what your cousin told you about the “rule of thumb” evaluations. I’ve met your cousin, he’s nice, but isn’t that bright.
Finally, be kind. The buyer is probably not a corporate raider trying to take over the world. They are probably nice people who are as nervous as you are. Build a little trust, have a little compassion and offer a little support. In reality, they are your ultimate customer. Treat them accordingly.
The common thread I see in every transaction, behind all the posturing, maneuvering and negotiating, is that there is a human being at the beginning and end of every connection. Each one of those human beings has talents, emotions, hopes, dreams, ambitions, fears, self-doubt, guilt, passion and a capacity to love and change the world. The degree to which both parties can bring a little compassion to the transaction is the degree to which both parties can win.