Seven Deadly Sins of Selling Your Business

 

Trend: thanks to low interest rates and improving economic outlooks, businesses are selling rapidly and at attractive prices. Many owners are selling their privately held businesses in the $1 million to $10 million range. A seminar coming to Costa Mesa on March 7 will answer business owner questions about how to confidentially convert the equity in their business into cash. Would you like an advance interview on the Seven Deadly Sins of Selling Your Business? Irvine valuation expert Barry Evans (10 years on Wall Street, ownership interests in several businesses with combined revenues over $25 million) can cover business selling trends and the seven worst temptations (to flesh out the story we can also offer other local experts including business sellers, attorneys and CPAs):

Pride is excessive belief in one's own abilities. Do not try to sell a business on your own unless you are an expert in taxes, law and valuation.

Envy is the desire for others' traits, status, or abilities. Yes, get help from experts, but never, ever pay advance fees to a business broker.

Gluttony is an inordinate desire to consume. Not how much money you want, but the true value of your business, is always the best starting point.

Lust is an inordinate craving for pleasure, like retirement. First the work (like legal documents and financing issues), then comes the play.

Anger is spurning love and opting instead for fury. If you enter into longer term agreements with your buyer, wrath can lead to litigation.

Greed is the blinding desire for material gain. Beware the risks in financing the buyer. Your objective should be to get "cashed out".


Sloth is the avoidance of work. Psychologically, once you decide to sell there is an inclination to slow down, earnings suffer and it lowers your business's value.

 

 

Written by Steve Fitzgerald, principal of Acquisition Services Group. For the last 23 years, the San Diego-based firm has specialized in assisting owners of privately owned manufacturing, distribution and service businesses in selling their businesses and structuring transactions keyed towards maximizing after-tax cash and minimizing confidentiality and litigation-related risks while also minimizing tax obligations. The firm conducts seminars to help small business owners learn more about how to sell their businesses. Call Steve Fitzgerald at (858) 320 0474, send e-mail here or visit www.acquisitionservicesgroup.com to learn more.