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Suggest You - Why Selling a Business is Different from Selling Anything Else
Every day we get emails and telephone calls from people who want to get started in Real Estate. We hear, I am just checking out your program. Or, I’ve been researching for the past six months to try and find a program. While researching and checking out programs is an important step, so many of these individuals never follow through to the next step, which is getting started and moving forward. Making a decision on starting a business or a program to help you start a business is the next step people. Otherwise all you have is “Paralysis by Analysis”. You can look and dither back and forth, with all the questions: “Will it work for me?; How long will it take? How many calls, letters, emails, (fill in the blank) will I hav
A business is worth what someone is willing to pay for it. End of story.
Isn’t this true of every product? Sure. But with other products you have the ability to compare to other sales in order to set a price. How much is your house worth? Ask your realtor. She’ll quickly look up comparable sales, as will the buyer’s agent, and determine a reasonably accurate probable selling price. There is an efficient market at work for most commodities
A small business usually has quite a few things to worry about that are a lot more important than business card printing. That is a bit like saying that a small airplane has more to worry about than keeping its engine running. It is advertising that makes a business fly and enables it to take off. The basic business card is one of the most cost effective methods of advertising available to the small business owner. Many small business owners view the business card as a status symbol frill for salesmen and executives of much bigger companies. The truth is that the simple business card is a necessary starting point.The business card has several elements and it comes in several styles. Its primary purpose is to provide contac
An Intangible Product
Just about everything for sale is a tangible thing. You can see what you’re getting. You know exactly what you’re buying. Unfortunately, this is not the case when it comes to selling a business.
Your business possesses a collection of tangible assets: your equipment, inventory, accounts receivable, etc. Contrary to what a lot of people believe, these are the items that bring the least value to your business.
It’s the intangibles - the assets that cannot be perceived by the senses - that make all the difference to a buyer. These are things like:
- Quality of management
- Uniqueness of business model
- Industry and market position
- Systems and procedures in place
- Quality of accounting and information systems
- Relationships with distributors & suppliers
- Customer loyalty and diversity
- Product/service quality and diversity
- Quality and morale of employees
- Patents, trademarks and other intellectual property
The value of these intangibles –that is, the amount paid by the buyer over and above the value of the tangible assets- is referred to as goodwill.
So what does this mean to you, the seller?
The real value in your business is found in things you cannot see, hear or touch. As the seller, it’s your job to convince buyers that these things exist and will earn them profits. Bet you don’t have to do this with whatever you’re currently selling.
A Product With No Objective Value
A business is worth what someone is willing to pay for it. End of story.
Isn’t this true of every product? Sure. But with other products you have the ability to compare to other sales in order to set a price. How much is your house worth? Ask your realtor. She’ll quickly look up comparable sales, as will the buyer’s agent, and determine a reasonably accurate probable selling price. There is an efficient market at work for most commodities
“Precaution is better than cure”, this proverb goes true not only in the health-care industry but in all industries, including those of heavy machineries. In addition to acquisition of raw materials, the efficient handling and storing of materials are vital to the heavy industry. The improper handling and storing of materials often result in costly injuries. To avoid such unwanted workplace hazards, the right material handling equipment is essential in more or less all heavy industries.Weight and bulkiness of objects are major contributing factors to the injuries at workplace in many industries. Bending, followed by twisting and turning, are also more commonly cited movements that caused back injuries. Other hazard
Your business possesses a collection of tangible assets: your equipment, inventory, accounts receivable, etc. Contrary to what a lot of people believe, these are the items that bring the least value to your business.
It’s the intangibles - the assets that cannot be perceived by the senses - that make all the difference to a buyer. These are things like:
- Quality of management
- Uniqueness of business model
- Industry and market position
- Systems and procedures in place
- Quality of accounting and information systems
- Relationships with distributors & suppliers
- Customer loyalty and diversity
- Product/service quality and diversity
- Quality and morale of employees
- Patents, trademarks and other intellectual property
The value of these intangibles –that is, the amount paid by the buyer over and above the value of the tangible assets- is referred to as goodwill.
So what does this mean to you, the seller?
The real value in your business is found in things you cannot see, hear or touch. As the seller, it’s your job to convince buyers that these things exist and will earn them profits. Bet you don’t have to do this with whatever you’re currently selling.
A Product With No Objective Value
A business is worth what someone is willing to pay for it. End of story.
Isn’t this true of every product? Sure. But with other products you have the ability to compare to other sales in order to set a price. How much is your house worth? Ask your realtor. She’ll quickly look up comparable sales, as will the buyer’s agent, and determine a reasonably accurate probable selling price. There is an efficient market at work for most commodities
80% of Americans are shy in at least in some situations, according to Dr. Phillip Zimbardo of Stanford University, who reported this finding in his book, SHYNESS.That makes shyness a more universal disability and a more vexing problem than excessive smoking or drinking.I’ve trained boisterous, burly 250 pound salesmen who have no trouble exuding confidence when closing deals face to face, but they break into a cold sweat when they’re asked to get on the phone and make a few calls.How can you cope with this malady and succeed?I have a different take on this topic than most, because I see shyness as a HABIT, and not as an inborn personality characteristic. I consider it a set of behaviors that we repeat
The value of these intangibles –that is, the amount paid by the buyer over and above the value of the tangible assets- is referred to as goodwill.
So what does this mean to you, the seller?
The real value in your business is found in things you cannot see, hear or touch. As the seller, it’s your job to convince buyers that these things exist and will earn them profits. Bet you don’t have to do this with whatever you’re currently selling.
A Product With No Objective Value
A business is worth what someone is willing to pay for it. End of story.
Isn’t this true of every product? Sure. But with other products you have the ability to compare to other sales in order to set a price. How much is your house worth? Ask your realtor. She’ll quickly look up comparable sales, as will the buyer’s agent, and determine a reasonably accurate probable selling price. There is an efficient market at work for most commodities
Mega--stores are a fact of life and they are not going away. If you own a small brick and mortar business, you just have to adapt. You must discover and exploit their weaknesses and you must develop your strengths. It’s a matter of your survival and you must do what it takes within the confines of integrity and the Golden Rule.Keep in mind that you are not even on the radar screen of the mega--stores. You are not competition to them, yet they are competition to you. To survive, you must learn their weaknesses and develop your strengths.Their WeaknessesTheir sheer size makes them slow to move and adapt. They have information about national market trends but they may be weak ab
So what does this mean to you, the seller?
The real value in your business is found in things you cannot see, hear or touch. As the seller, it’s your job to convince buyers that these things exist and will earn them profits. Bet you don’t have to do this with whatever you’re currently selling.
A Product With No Objective Value
A business is worth what someone is willing to pay for it. End of story.
Isn’t this true of every product? Sure. But with other products you have the ability to compare to other sales in order to set a price. How much is your house worth? Ask your realtor. She’ll quickly look up comparable sales, as will the buyer’s agent, and determine a reasonably accurate probable selling price. There is an efficient market at work for most commodities
Is your trade show booth beginning to show its age? Have people seen your booth so many times that you've gone way past branding and on to boooooring? Are you just wishing you had the money to buy a new trade show booth, but can't scrape enough together to purchase one?Well, you'll be happy to know that it really isn't necessary to buy a whole new trade show booth. You can fix up the old one in no time flat AND with little pain to your bottom line.One of the first things you can do to spruce up that old trade show booth you have is to buy or plan on renting some nice palm plants or other large plants to put out front. Plants and greenery not only help disguise some of the booth's wear and tear, they create an ex
A business is worth what someone is willing to pay for it. End of story.
Isn’t this true of every product? Sure. But with other products you have the ability to compare to other sales in order to set a price. How much is your house worth? Ask your realtor. She’ll quickly look up comparable sales, as will the buyer’s agent, and determine a reasonably accurate probable selling price. There is an efficient market at work for most commodities.
But not when it comes to selling a business. Although you will want to look at comparable businesses when trying to set a price, you have to keep in mind that there really are no comparable businesses. Your business is unique because of all those intangibles we discussed.
Sure, you can get opinions of value. You can get them from industry associations, business brokers, valuation experts, accountants, friends and even your spouse. And they’ll all be different. Each person who attempts to set a value on your business does so through personal filters and judgments about what’s valuable.
How do you sell something when no one seems to know what it’s worth?
A Product You Can’t Walk Away From
Sell anything else, collect your money and you’re done. Sell a business, and you can’t just walk away.
You may end up tied to the business due to:
- Seller financing. If you’ve invested in the business by financing the buyer, you’ll want to make sure it’s being run well until the money is paid back.
- Training and consulting. Most buyers want the seller involved for some period after the sale. This can range from a few weeks to several years.
- Earn-out provision. In an earn-out, some of the proceeds of the sale are dependent upon the future success of the business.
What if you really just want to be done with the whole thing? Sellers who are reluctant to stick around and/or finance part of the deal make buyers nervous. You will lower your selling price and may even find it very difficult to sell.
A Product You Can’t Openly Advertise
You want the whole world to know your products are for sale. You want everyone to know your house is for sale. Advertise, adverti
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