Many years ago I bought a small privately owned business, and over the ensuing five years worked hard to grow it into a larger business. I decided to take the business to market and engaged a Broker. Then I made a costly mistake that I have subsequently seen other buyers make.
I assumed it would only take a couple of months to sell my business. After all this was a well oiled, very profitable and highly desirable business. So I thought I would get a head start on pursuing my passion….golf. Once the decision was taken to place the business on the market, I figured I’d earned the right to spend time working on my golf game.
Sure enough the hard work at the golf course had the desired results. The handicap started heading south, but so did the revenue of my Company. I was the chief Rain Maker, and although there was some sales momentum built up before I put the Company on the market, this quickly dissipated. The lack of an owner’s footprint on a privately owned business had its inevitable effect.
Declining sales was obviously a problem, but the even bigger problem was the impact this was going to have on the price I was going to get for the business. The marketing materials being shown to prospective buyers projected a continuation of the strong sales growth. But this sudden slippage created uncertainty in the minds of buyers as to whether this was a hiccup or negative trend, etc, etc
After it became obvious that I needed to put my foot back on the gas, it took some time to get the momentum built up again. Bottom line, I still got a good price, but not nearly as good as I would have if I stayed in the saddle.
Don’t make the mistake I did. You must assume the worst case. You may not find a suitable buyer or get the price you need. Don’t compound the situation by neglecting your business.