The most interest over the last weeks has been “When Is the Right Time to Sell?”
The answer to that question moves amongst how-long-is-a-piece-of-string and who really knows. Nonetheless, there are a few prime clues that I have explored with you over the past number of posts…
In my experience, the price discussion causes more angst than any of the preceding steps.
What is being addressed here is:
- not what you’ve invested
- not what hours you’ve worked
- not what you think it’s worth
It is instead about the realities, at this point in time, in regard to the calibre of the asset you are taking to market.
And this is where the disconnect invariably lies.
When appraising a business, we always come up with a most “Likely Price Range”, similar to real estate. This range is based on the quality of the previous steps and how well you can prove them.
Certainly part of our analysis is we ask what price you want.
We then ask how was this price arrived at.
And what is it based on.
This will usually give us clues as to how realistic your price is and how likely we are to be able to sell it at the price you want.
In most cases, advice has been received from parties not aware of current market forces and pricing, which therefore creates a more nonsensical starting point. It then takes time to get real. Resulting in the shop around in the hope of getting a better price.
A word of caution here… be very sure about not only whom you’re getting your advice from, but also marketers passing as brokers. When they say they will put your business on the market for what you want and you have to pay a LOT of money for the privilege upfront – STOP! Come and see me first. There are many a disenchanted business owner around, who has paid thousands and thousands of dollars only to never get a lead and to never hear from the marketer/broker again. Even when they call the office number provided!
Seriously, if you want to get the kind of price you envisage, start doing the things noted in the Steps through to this one.
- when is the Right Time to Sell? step 2 – how is business generated?
- when is the Right Time to Sell? step 4 – how does stuff get done?
- when is the Right Time to Sell? step 7 – why are you selling your business?
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