Myths About Selling Your Business
The Four Biggest Myths About Selling Your Business
The world of Mergers & Acquisitions is rife with misinformation. People tell you what you want to hear, or attempt to make a quick buck off your ignorance. The result is a confusing morass that makes it difficult to make good decisions. Here are four stubborn myths about selling a business that need to finally die.
Your Current Team of Advisors is Enough
Your current business advisors serve a purpose, and they might be great at their jobs. They may even play a big role in your business’s success. The problem is that your current team of advisors might not have much M&A experience. If your advisor isn’t a transportation, logistics, or trucking specialist in M&A, you won’t know if they’re good at it until it’s too late. Don’t let your advisors learn on the job. Hire an expert.
Sure, you trust the people you’ve always worked with. Maybe you worry that they’ll be mad at you. But selling your business is a once-in-a-lifetime opportunity. You need to get it right—and getting it right requires a logistics consultant, not a generalist. Don’t pay for professional advice that might not pan out.
My Business is Special
Your business is special to you. And every business is unique in its own right. Yet every business owner thinks their business is the exception to all the rules. Simple human psychology is full of cognitive biases that make us think our business is more valuable than it is, or that a buyer will overlook bad books because of how special what we offer is. Don’t bank on it.
There are outliers, yes. But predicting which business will be an outlier is tricky, if not downright impossible. The overwhelming majority of M&A transactions take place within a predictable set of variables. So don’t expect that these norms won’t apply to you. They almost certainly will. And even if they won’t, assuming otherwise can help you get your business ready for a sale.
Selling is All About Me
Many owners struggle to separate their own identities from their business. So they naturally think that the star player in the deal is them, and that they’re the one in control of the sale. The reality is that you can’t walk away from your life’s work without making it worth someone else’s while.
A take it or leave it attitude can sabotage virtually any sale. No buyer wants to work with a jerk. Buyers want real value, and you must show them that this is what they’re getting. Be easy to work with, and willing to compromise. Show the buyer why your business is worth the investment. It’s the only way to cross the finish line.
Are your goals important? Of course they are. But so too are the buyer’s. Neglect them at your peril. A good deal leaves both sides equally happy—and equally unhappy.
I’ll Sell When I’m Ready
This is perhaps the most pervasive, and the most insidious, myth. Many owners think that when they’re ready to pack it in, they’ll put their business on the market and all will be well. This approach will leave a trail of missed opportunities, and may mean that your business isn’t ready to be sold when the time comes.
Selling a business is fundamentally different from selling a house. It’s not about just finding a buyer. Before you sell, you’ll need to consider myriad factors, including:
- Are you ready to sell? It can take years of preparation to increase value, or even just to make your business appealing to a single buyer.
- Is this a good market? Market shifts can greatly alter value, and even make it impossible to sell. Consider the owners who were ready to sell in 2009 when the economy crashed. Many had to wait till 2012 or beyond.
- Is now a good time for a sale in this industry? Sales are about more than individual businesses or the larger market. Various industries have their own trends, and you must tailor the timing of your sale to these shifts. Consider how plummeting oil prices can make it nearly impossible to sell a gas and oil business even in an otherwise booming economy.
Sales demand preparation, and preparation can take years. Don’t let hubris about how easy your business will be to sell interfere with the possibility of a lucrative deal with favorable terms.
We are more than traditional business advisors. Our approach is rooted in more than 60 years of hands on transportation experience and we apply these industry specific best practices to make impactful recommendations for your business. We are trucking profitability consultants and experts who are focused entirely on the Trucking, Transportation, Logistics and Supply Chain industries. When you work with Linq, you are guaranteed real world advice and strategies that have stood the test of time, will save you money, and ultimately enhance your bottom line.