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Article
It’s all about the presentation…
Richard Gadberry, CBB
There are several phases involved in
preparing a business for sale. First, the broker must
determine what tangible and intangible assets are for sale
for potential buyers. Then the broker identifies what the
audience or market might be for the business, as well as a
correct price for that business. However, the most
important step in preparing a business for sale is the marketing portfolio.
In most cases, the business owner has
invested many years of hard labor, and survived many trials
and tribulations in order to build a successful business.
When owners are considering selling, they want to reap the
rewards of their investment.
By
creating a good marketing portfolio, the broker captures the
essence of the goodwill, the intangibles, and outlines why
the business is worth the stated fair market value. The
marketing portfolio tells the story of the company’s
financial, historical, marketing, and growth performance.
Most business owners are reluctant to pay a
broker marketing fees for preparing their business for
sale. They consider marketing their business similar to a
real estate listing. They believe that the closing
commissions can cover the broker’s costs. However, business
owners need to consider these facts:
No two businesses are alike. The fact
that we have listed and sold similar businesses has no
direct bearing on the value and price of your business.
A company’s management style, debt structure, employees,
customer base and length of service are all factors to
consider when determining price.
When selling real estate, there are
comparable properties within a few hundred yards of the
property for sale. A realtor will do a reasonable job
of presenting the property, but the price is determined
by comparables.
Real estate is not sold on goodwill or
intangible value. Real estate is sold with a picture
and a nice listing sheet. You don’t want your many
years of hard work, and in most cases your future
retirement money, presented in this manner.
Just because you want to sell, does not
mean the business will sell. Many factors determine the
success of a business transfer. The broker’s skill and
experience certainly will factor in the success ratio.
However, we have found that other than financing, the
relationship between the buyer and seller is the most
important factor in closed transactions.
In our experience, the success of a sale is
all about the marketing and presentation of the company’s
finances, of its future market potential, of the seller’s
historical data, the buyer’s business plan, and financial
worthiness. It is the sizzle that sells the steak!
About the Author Richard Gadberry
has over twenty-three years of experience in various
supervisory, management and executive management positions
in both operations and sales and marketing. Mr. Gadberry is
currently the Vice President - Affiliate Services for
Business Brokers Network where his main responsibilities are
to assist in responsibly growing the network through
affiliation, providing ongoing support to BBN. Affiliates.
provide vehicles of continuing education, and to add
products and services of value to BBN. Affiliates. and the
network.
