03 Nov Saying “NO”……
We say “no” to many potential listings. This month starts my 50th year selling businesses. We have sold around 7,000 businesses in that time, earned “enough” money, and, more importantly, made a lot of friends and built strong relationships with many professional advisors.
Fundamental to our growth has been our commitment to truth and honesty in all our dealings with clients and customers and our belief in the “golden rule” – do unto others as you would have them do unto you.
One aspect of this is providing an honest appraisal of market value to potential business sellers. We try to tell owners what they need to hear, not what they want to hear. We are not trying to sell them “up-front” marketing fees to obtain the listing and then beating them down over time. We want to quote sales and profits that can be verified by the buyer or his/her accountant.
Yes, we are conservative. If the owners claim that they are “skimming” money off the top of their sales, we are not going to pass it on. If it is true, it will be a pleasant surprise for the buyer, if it is not, we do not want to be in court alongside the owner. And we are wary about forecasts, especially in these tough times. It will be the buyer’s time and money that accesses that potential.
While we will always try to give honest appraisals, we often take listings at a higher price to “test the market”. We recognise that price is different to value and will depend upon the negotiating skills and motivations of the parties and the actual deal structure if a sale is effected.
By pricing businesses realistically, the chances of a successful sale and maximised price are greatly improved. Over-priced listings and figures that do not stand up to due diligence do no one any good. Our top salespeople have a high list / sell ratio and many happy clients. Our reputation is important to us.