If you own a small business there's a good chance that you have been approached by a business broker.
Have you ever thought about selling your business?
Business brokers struggle to get business owner's 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 that he could sell for them – "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
The answer varies from broker to broker, but every answer, and the statistics on the sale of small businesses, point to one clear reality: most small businesses will never sell. Brokers don't advertise this fact, because it's already hard enough to get an owner to talk. In fact, some brokers ignore the fact entirely.
“I can sell any business.”
Some brokers advertise that they can sell any business. It’s a sales pitch that is both true and untrue at the same time.
True: If and owner empowers a broker to lower the sales price of a business as low as necessary to make a sale, they can probably “sell any business.”
False: Since the owner would lose all practical benefit of a sale at that "fire sale" price, they would never authorize a sale 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 (and especially 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 a broker 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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