Mike Whittle (UK Managing Director) and Steve Barry (Client Director) of EvolutionCBS highlight the value of trust between the seller and the business sales team and how it can play a key role in your business’ smooth sale.
You’ve decided to sell your business. The next step is to find a team to help you do that well.
Trust is everything. How do you know if you can trust your team?
The best time to discover the ‘trust factor’ is in the early stages of your relationship when the process seems to take a while to get going. A good litmus test is the amount of time that your team spends on in-depth research in the early days.
The initial round of questions might take longer than you’d expect. Thorough research takes time and ought to be painstaking. Your best buyer is not necessarily the one in the spotlight. He or she might be hidden away, waiting to be discovered by rigorous investigation.
A ‘generic search’ for potential buyers might look impressive - roving the world while the ‘super-research’ one is putting on its boots … but don’t believe that you’ll save time by using a speedy, software-driven generic search. Your best buyer will be worth a lot of finding.
The three traps that we’ve seen disrupt a smooth sale most often can all be dodged if you have trust in your team:
TRAP 1: SECTOR SPECIALISM
We regularly see new clients who have been to market before and who have not been able to sell. Very often, their sales team has confined their buyer-search to within the seller’s own sector.
We’ve consistently had more success with a less myopic approach. Why keep the search so close to home when there are so many complementary businesses out there who may be looking to expand in your area or to diversify?
Although a sector search might seem a targeted one, it’s often carried out via generic, search tool software. Many of the businesses that might be viable prospects will be missed in the first cast of the net.
You’ll never know how good your prospects are until your team does the research.
We know that intensive research is the key to a successful sale as it works so well for us. It’s simply not enough to hope that a generic search will find you the right buyer.
TRAP 2: THE EMOTIONAL ‘FIRST BID’
It must be great news that somebody wants to buy your business … unless, of course, the bid is disappointingly lower than your expectations. The first bid, though, is your first, real market evaluation of your business’ worth.
“But this is my baby! How dare they!” is a common response. Sometimes, we hear it expressed more spicily but it’s natural. Would you be willing to let go of your business to someone who thinks it’s worth half as much as you do, after all you’ve invested in it?
Remember, the first bid is just a starting point. Your business is unlikely to be ready to market right away. To secure your best sale, it needs refining – a process that takes an average of twelve months to complete. Keep the faith … trust your team.
TRAP 3: THE EMOTIONAL FINAL FURLONG
When the finishing line is in sight and you’re about to hand over your business to someone else, you might suddenly feel hesitant and insecure. You start to second guess … is this really the right buyer for your business? Are you coming in too low on the price?
Emotions can run so high at this point that a great negotiation can be lost in a quibble over a relatively small amount of money.
Resist the urge to niggle. Yes, perhaps you could have asked for another grand on this asset or that – but if you agree that your team has done an excellent job in finding this particular buyer based on the overall deal, let your experts get you over the last hurdle.
Keep the bigger picture in mind. Last-minute jitters are par for the course. The last few steps before the end can be dramatic and fraught with emotion: if you trust your team of experts, you can safely let them carry you over the finish line.
by Mike Whittle and Steve Barry