- August 1, 2024
- Posted by: Business Brokers & Consultants
- Category: Seller Articles
It’s generally understood that the most effective approach to selling a business is avoiding a, “Sell… Sell! SELL!!!” mindset. Instead, adopt a strategic attitude and consider the three keys to an advantageous sale. First, understand the value of your business, and exactly who desires most to have it. Then master the timing of the sale.
We have all seen this truth play out in publicly traded companies. When panic sets in on the stock market, even blue chip companies can loose value. Yet, the principle is largely forgotten when entrepreneurs consider the sale of their privately held businesses. There may be nothing you can do to influence the stock market. But, as a business owner, you can certainly command the mindset and timing that factor into the sale of your business.
One excellent example of avoiding the “sell…Sell!…SELL!” mindset can be found in Cary Reich’s 1996 book, “The Life of Nelson Rockefeller.” J.P. Morgan and John D. Rockefeller, Jr. were in negotiations over Rockefeller’s Mesabi iron ore mines. When Rockefeller Jr was asked by Morgan’s team to put a price on the mines, Rockefeller Jr astutely replied, “I think there must be some mistake. I did not come here to sell. I understand you wish to buy.”
Morgan eventually did purchase the mines, however, the final purchase price was set significantly higher. Though anecdotal, this glimpse into the negotiations highlights some very important points.
#1 Mastering the Mindset
Rockefeller, Jr. adopted a “player” mindset, and tactfully established his footing in the negotiations. He demonstrated an understanding that there was no great need to sell, and that he understood the value of the assets. Moreover, he recognized Morgan’s need to acquire them. When it comes time to sell, no one is more qualified to do the same thing for your business then an experienced intermediary. Selling a business can be emotionally draining on a business owner under the best of circumstances. The Principals at Business Brokers & Consultants are skilled and tactful negotiators who separate emotion from the negotiations. Our experience and mindset going into the process enable you to negotiate from a position of power you would not necessarily command on your own.
#2 Mastering the Moment
There is no better time to sell then the precise moment you are approached by a motivated buyer. Whether that moment takes you by surprise, or you have already listed your business for sale, our Team is key to mastering it fully.
In the case of the former, you may be approached by a competitor or larger company acquiring businesses like yours. This may happen at time when you are not even contemplating an exit. Three things become vital at that moment. You need to know the value of your business and whether or not you are willing to part with it. You need to be able to complete the due diligence process quickly, and you need to enter negotiations with an advisor on your side who understands the acquisition process. Business Brokers and Consultants can quickly provide assistance in all these areas. In fact, we often receive referrals from the acquisition company as well as the seller we represented in a transaction of this kind. Both parties agree that our efforts moved the negotiations forward smoothly and due diligence requirements were meet in record time.
In the later case, when you are planning to sell, we consider who will be most interested in acquiring your business. This might include competitors, companies in related industries, or investors looking for new opportunities. Sometimes, we already have a buyer in our database who is looking for a business like yours. We look for buyers who see strategic value in your business, beyond the financials alone. Their motivation may be market expansion, acquisition of technology, or acquiring your customer base. Our unique knowledge of the regional market allows you to strategically time your exit.
As a business owner, your primary focus should always be on successfully running your business. Engaging our services allows you to master the timing and mindset required to sell at the very best price and terms.
Copyright: Pamela Florence, Business Brokers & Consultants, Inc
This Post is based on Mastering Your Mindset: Strategic Approaches to Selling Your Business which appeared first on Deal Studio.