Selling your own Business is a Bad Idea
Over the years I’ve learned many things. One of which is, it’s never a good idea to try and broker your own transactions. This is true for houses, cars, boats, and yes, businesses.
The following is a list of the top 10 reasons why selling your own business is a bad idea:
- You are not objective – even if you have financial skills, you’ll have the tendency to overestimate the value
- You are too close – you will take it personally and perhaps kill the deal. Nobody likes to hear they have an ugly baby.
- You wont get as much value – there is a reason pro athletes & actors have agents…..because they get more money and better terms
- You don’t know how to arrive at fair market value – unrealistic owners are the biggest reason why deals fall through
- DIY selling will devour your time – you know how to run a business….this is no time to learn how to be a professional intermediary
- You don’t know how to recognize (or find) a qualified buyer – you need a market maker who is knowledgeable in your industry
- You will have a tendency to talk too much
- You don’t know how to read the documents and the lingo – a trained intermediary does
- You are in an adversarial position with the buyer
- You don’t know all the tax implications of your deal – it’s not always about the price, but how much you get to put in your pocket
