It happens more than I can count. I meet with an owner who’s interested in selling his business and I go through my process to identify a fair market value of the company and how much it will probably sell for on the open market. Based on the size of the company, this process can be rather arduous and time consuming, but as any broker will tell you, the market will ultimately tell you how much the business is worth. Regardless, the number I present is met with disbelief or frustration because the sell needs more money from the sale in order to retire comfortably. This happened recently with two owners of a shop here in Murfreesboro. These guys were frustrated with the burden of their business and simply wanted out but it wasn’t worth even the amount of debt they personally carried on the company! Instead, I started working with one of the owners to turn around their business to increase their profit thereby selling for a higher multiple in the market. I can say after three months, the owners now take home a decent paycheck which they haven’t done in the past two years. Now that the burden of cashflow has eased, they’re talking about the future of the company and possibly opening another shop. A true cinderella story. I can’t take all the credit because the owners had to accept certain facts:
They are ultimately responsible for the success and failure of the company. Not the economy. Not the customers. Not the workers.
They had to be open to changing how they worked in the company
Improvement wasn’t going to happen overnight.
Change was going to be difficult but perseverance was necessary.
Over the first 6 weeks, I received emails and text messages filled with disappointment, frustration, and pain, but the owner stuck with number four… perseverance. It’s paid off. I’m very proud of the owner, his wife and family that worked and decided failure wasn’t an option.
The above is a great story for me and am proud to be part of their turn around. For other owners that don’t know how much their business is worth should find out right away and not wait till they want to sell. The owner in the story above is young and has time on his side. Most sellers I meet with are retirement age and lack time and youth. Below are eight items that I work with owners on to increase their business valuation. This methodology has been around for several years and works!
By working with owners utilizing the ValueBuilder System, we have been able to increase owners business sale by 71%! This percentage isn’t an outlier number but rather a consistent value increase.