Don’t Blow Your Money When Trying To Sell A Business!
Don’t Blow Your Money When Trying To Sell A Business!This will be a short post as I want to get it to you quickly. I have advised clients about this in the past but following a recent marketing campaign by a firm claiming to be business brokers, I thought I should re-post this message.
Basically, there are a few large corporations out there making claims to be business brokers and selling businesses via very expensive glossy advertising in magazines. Sometimes the company involved claiming to sell businesses has interests in the media publication involved.
Their Main Interest Is To Sell You Advertising – Not Sell A Business
Before you engage anyone to sell your business, check out the following;
- Are they registered business brokers complying with Australian Government regulations?
- Do they know and operate in your local market? That is, do they have an office in the state and people on the ground?
- Did you get a written appraisal of your business or did you just ‘agree a price’?
- Can they give you names of business owners for whom they have sold businesses?
Just make sure you do your due diligence on anyone before you list with them and find out how they will go about selling your business, not just placing an expensive advertisement in a magazine. For detail about how the ACCC and the NSW Government view these people READ THIS! It includes a sample of a recent marketing campaign and an Australian Institute of Business Brokers press release.
On a slightly different topic – also beware ‘online business evaluations’. Many of these are based in the USA and in any case are very basic and unlikely to reflect true local market values in your area.
To get the low down on valuing a business and preparing it for sale, attend one of my half day workshops. DETAILS HERE
Until next time – keep those numbers going up!
John Denton
Hey John
good to hear from you . Yes it never ceases to amaze me that so many people / businesses can fall into these traps , with so much publicity about dud web sites & scams you would think people would be more diligent . On the other hand of course there are some very clever and unscrupulous sales and marketing people out there only too willing to take the easy dollar. its not only ” buyer beware ” but ” seller beware ” as well.
Enjoy your day.
Thanks Peter!
At the end of the day, these companies I’m talking about, are not braking any laws (unless they call themselves business brokers) they are simply collecting a large ‘advertising fee’. The problem is that they are selling it in a misleading way. Hence the ACCC’s media release about them.
Thanks for your comment Peter.
Business is not a cup of tea for anyone. It required smart business skills, hard work and a good knowledge of current business and marketing trends. . The self assessment is very important before selling the business. The business valuation is very important part in selling the business.This post is very informative and well written.
Very true, John. Aside from this latest scam, I’ve often been surprised at the value some people accept their business is worth.
There are cases of some brokers over-valuing in order to win the listing, and others of businesses being significantly under-valued, presumably to ensure delivery of promises of a fast sale.
The service you provide – where you help the buyer prepare the business for sale but don’t act as broker – removes any incentive for you to lie (not that I’m suggesting you ever would!).
If I’m ever uncertain of the cost of a major repair on my car, I take it to a mechanic and ask for a diagnosis, having first told them they won’t be asked to do the repair. In that way I get an opinion from someone who has no incentive to be anything other than totally honest.
It’s just common sense, and if I were ever selling a business I’d certainly involve you, even if I were going to use a broker.
Thanks Rex for your comment. I always try to be as honest and as objective as possible so that business owners have a realistic expectation of what their business will sell for and how easily (or not) as the case may be. At least then they know where they are starting from and what challenges lay ahead. That’s why it is so important for business owners to be thinking about these things years before they want to sell or exit.