What Business Brokers Do… and Don’t Do
A lot of folks ask us if we sell businesses (we don’t). And so it was with interest I read this article by an exit planning fella this week. He made the point:
It’s not a business broker’s job to say you’re better off waiting two years to make your business even more sell-able
And that’s a fantastic point. We often refer folks over to business brokers that we think can best help them sell their company. When an owner engages us to value their company, and then asks for an introduction to a good business broker, we are happy to oblige.
But what’s being left on the table? As valuation experts, our role is tactical: we opine on the value of a company today. When you engage a business broker, you engage them for the purpose of selling your company today (or as soon as possible). It’s a tactical role.
What’s often left unexplored, of course, is the question “is today the right day to sell?” As valuation experts, we sure don’t know. We can look at a company and think “gosh, there’s a lot they could do to pump up value…” – but without knowing the context we can’t really say if it makes a difference or not. Perhaps the owner’s retirement is set, and a sale “today” means retirement happens sooner – so speed matters. On the other hand, oftentimes the sale of the business is the retirement plan for the owner, so every dollar counts. In that case it would probably make sense to work on improving the business until value matches your goals.
And that, friends, is why we harp on the importance of exit planning. Exit planning is not an event, it’s a process. It involves understanding your value today, understanding what you need to it be… and then creating a plan to get you there.
So sure, we’re always happy to refer you to a great broker. And if you ask the question, we’ll refer you to a great exit planner too….