Don’t make the same mistakes we see in this business for sale article – sales pitch with deep undertones of a failed business.
Warning! Warning! Warning!
There are certain warning signs that tell you you’re dealing with a failing business, before you ever see the financials.
First, take a quick look at this article describing a business for sale: Front Porch Tea Room goes up for sale.
Now, note these three warning signs of a “lipstick on pig” business for sale:
When They Sell the Breadth Not the Bulk.
Throughout that time, Helm says she’s served guests from all 50 states and 53 countries. “I stopped keeping track about four years ago,” she said.
If you feel compelled to stress the geographic diversity of your customer base, instead of the high number of customers, that’s a warning sign. “We’ve sold products in 27 states” translates into “I have one sale in each of 27 states”.
When the Broker isn’t Selling the Business, but the Potential of the Real Estate.
Heather Kreiger of ROCK Commercial Real Estate said the property and business have the “potential to be an outstanding wedding and special events destination.”
It’s a tea house now, but it could be “outstanding” as something else. Not questioning the broker’s strategy as it may be the best argument to justify the price, but it tells you ahead of time what to expect when you see the business financials.
When You are Asked to buy the Tradition, not the Results.
“I really hope someone doesn’t turn it into a hair salon and real estate office,” she said. “The Tea Room has truly been a blessing to me, and I look forward to finding a person who will carry on the tradition.”
Why would you turn it into a hair salon if the tea house was successful? No additional explanation necessary.
Please know we wish Ms. Helm great success in the sale, and we know nothing about this business, so this post could be completely off base in terms of the financials. But even if it is, it doesn’t change the value of the message.
If you scream “PIG!” like this sales pitch does, people are going to see through the lipstick.
