Business brokers can’t help you completely prepare your business for sale

It takes time to prepare your business and yourself for sale. Of course, you could wake up one day and decide to sell, call a broker, and take your chances with your broker’s attempts to initiate the auction frenzy. This process could take from 3 to 12 months to complete. A good broker could get a premium of 10-15% via the “bake off,” but, you will leave money on the table. A lot of money.

To properly prepare your business and yourself for sale, you need to plan 3 to 5 years prior to get the maximum value possible. Essentially, you need this amount of time to demonstrate that your company trends well financially and operationally. And, you also need time to prepare yourself and family for the changes that will occur once you finally sell your business.  Interestingly, PwC surveyed over a thousand business owners who had recently sold their businesses, and discovered that more than 72% of them regretted the process because they felt they were not properly prepared.

If you plan on selling your business within the next 15 years, you need to consider the impact of the massive wave baby boomer business owners (“The Perfect Storm”)that will also be selling their businesses within this time period.  Based on the statistics discussed in this post, it is imperative for business owners to start preparations as soon as possible.

Properly preparing your business does take time, but that doesn’t mean its complicated. Private Equity Groups and Corporate Development departments of the Fortune 1000 buy and sell companies and divisions all the time, and you know that when they do they have a plan and a process to ensure they don’t leave money on the table. It is this plan and process that we teach at The Owners University. You can learn more about it HERE.

I tweeted a couple of videos about the subject from The Wall Street.  In case you missed them, you can see them and get a quick description below:

There are plenty of financial and non-financial issues owners need to address before they sell their business. (Click to view)

It’s never too late to start succession planning for your business. PwC’s Alfred Peguero gives some tips on how.(Click to view)

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8 Responses to “Business brokers can’t help you completely prepare your business for sale”

  1. Jake February 5, 2013 at 9:48 pm #

    Great article. I’ve signed up for the course. I am fearful of hiring a broker at this time.

    • Bob Pullar February 5, 2013 at 9:57 pm #

      Thanks Jake. We will help you determine when is the best time to connect with a broker and we will also help you determine the qualities a good broker should possess. Welcome aboard!

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