In his article, Paul Sullivan discusses the mistakes that many people make when selling a business and not consulting a business adviser. He explains,
The mistakes people make in selling their businesses stay with them long after the check has cleared and their new life has begun. They may have a considerable financial cushion, but because their wealth came from building something from nothing, they had a deep attachment to the company. It was their livelihood and their path to wealth, but it was also a part of who they were. Not managing the sale as best they could continues to gnaw at some of them.
For small-business owners seeking to sell in what remains a strong environment for mergers and acquisitions, the lessons learned by those who have gone before them can be instructive.
“Selling a business is not all about the financial side of it,” said Terry Mackin, managing director of mergers and acquisitions at Generational Equity, a business brokerage. “Most are focused on the dollars, initially. They want us to tell them how much their business is worth. But they find there’s an emotional part to this. Eighty percent of the deals I’ve done have not sold for the best dollar offer.”
Jay Messing, senior director of planning for Wells Fargo Private Bank in the Northeast, said he often advised people looking to sell their businesses to become more formal with everything from books and records to how family members are treated in the business.
“People aren’t as introspective as they could be,” he said. “They’re not running the business as tightly as they could be because they’re running it for themselves.”
The first piece of advice is to start running the business as if a buyer will come along at any moment. “Whether it’s now, five years or 10 years down the road, if you’re not ready and that buyer comes, you may not get that price that you want,” said Karen Reynolds Sharkey, national business owner strategy executive at U.S. Trust.
Click here to continue reading the full story: Selling a Business Involves More Than Money
Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal