If you own a small business, you know there’s probably a business broker (or 50) that would like to talk to you.
Like everyone else, business brokers struggle to get your attention. They try to figure out a way to cut through the noise. They work hard to get a little bit of your time. Cold calls, advertising, social media, referrals – they hustle to connect with you.
But all that hustle hides a secret they don’t want you to know.
What’s the secret?
The secret is that your business is probably un-sellable, and they know it before they ever talk to you.
"1 out of 15”
That’s what a long-time business broker recently told me was his best guess. I asked how many of the prospects he talks to have a business they had any chance of selling – 1 out of 15.
In his opinion, 14 out of 15 were un-sellable.
- Too small.
- No cash-flow.
- Too owner dependent
- The reasons go on and on
I ask this question every chance I get, and the answer varies from broker to broker. But all the answers, and the statistics on the sale of small businesses, point to one clear reality: most small businesses will never sell. Even with that reality, some brokers go even further than keeping the secret – they openly deny it.
“I can sell any business.”
Some brokers will push out there that, “every business can be sold.” It’s a sales pitch that is both true and untrue, at the same time.
Yes, if you empower your broker to lower the purchase price far enough, they can probably “sell any business.” However, since the owner would lose all practical benefit of a sale they would never sell at that price, so the broker can’t really “sell any business.”
But true or not, it’s another technique broker’s use to try to have a conversation with you.
So, the brokers keep reaching out. What should you do?
You should spend more time talking to business brokers.
It might surprise you, but I think every small business owner should talk to a broker at least once a year, even if they have no intention of selling their business any time soon.
Most businesses are un-sellable. Why? Because most business owners have no idea what makes a business sell-able.
Talking with brokers can help you educate yourself about what it will take to sell your business when the time comes.
Spend 15 minutes with whatever broker reaches out to you next.
- Ask them what a sell-able business looks like.
- Ask them how long it takes for a business like yours to sell?
- Ask them what percentage of small businesses that are listed with them actually sell.
Be aware, they’ll try to get you talking about your business, and that’s OK. See, they are trying to figure out if you are the 1 out of 15 – they want to know if you have a sell-able business.
Wouldn’t you like to know?
Talk to the broker. Remember: they know the secret: most small businesses are un-sellable in their current condition.
Ask them why.
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