Business owners selling their business often ask: ‘How many buyers does it take before my business sells?’ That is a great question. The answer is: it depends on you. Way too often we see a typical situation as follows. A business owner is a self-made entrepreneur. They are used to calling all the shots and directing their employees in their roles. They like the idea that “the buck stops here.” Self-made business owners enjoy what they do. That’s why they do it. They love being in charge. However, here’s the rub: most have never sold a business and have no experience at it.
So, what do they do when it comes time to sell? They do what they have always done and keep trying to call all the shots. While they are doing that, two things are happening. First, they are scare off the serious buyers and second, they learn how the sale of a business works.
Imagine this scenario. An owner of a $5 million dollar business decides to sell one day. A buyer comes along who is interested. Nondisclosure agreements are signed and an introductory phone call is set up. The buyer begins to ask pointed questions about finance, sales marketing, personnel, etc. The owner is reluctant to answer specific questions about finance and instead talks about his personal history in building the business and the obstacles he overcame. They buyer brings the conversation back to specifics related to ROI and the owner instead talks about the potential of the business. Eventually the call ends and the buyer’s interest over the next few weeks fades away. Why? The buyer is shopping and is looking for the right financial deal. Because he did not get the information he needs, he moves on in the shopping process.
As business intermediaries, we have seen this again and again. A good intermediary wants to introduce serious buyers to sellers with solid businesses. The intermediary wants to see deals close. What we don’t want to see is serious buyers wasted on sellers who need an education on how the process works.
One of the wisest things a business owner, who wants to sell, can do is listen to the advice of the business intermediary. The intermediary has been through the process lots of times before this transaction and will anticipate what the buyer is interested in. With a little bit of coaching, the seller will find serious buyers ready to move forward once their questions get solid answers. When that happens, the whole sales process can be shortened. The owner will discover the answer to the question: ‘How many buyers does it take before my business sells?’ is just one.