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Learn From Other Owners When Preparing For Business Transition

by Dave Driscoll


St. Louis-area owners are learning the essential themes of planning and timing – sometimes the hard way. Metro has conversations with those ready to sell or planning to sell and occasionally with owners who must reach the emotional understanding that their life’s work will not sell for an amount greater than the liquidation value. This is the third and final example in this series to help you plan or avoid missteps in your journey to your Life Beyond Business.

Example No. 3. After three decades, the owners of a successful family retail business were ready to unplug from the daily responsibilities of business operation. They were well past the “burnout” stage but were willing to stay on with a new owner as long as needed to ensure a smooth transition. They enjoyed the industry and had a tremendous amount of insider knowledge and contacts to benefit a new owner.

When we connected, it was their second attempt to sell. Several years earlier they had contracted for one year with a local business broker whose business model was to gather listings, place the information on the Internet and wait for inquiries. During that year, they saw the broker only once, when he introduced one prospect. He didn’t invest the time to understand the business, assess the financials to determine sellability, create marketing material to promote the sale or offer any advice to improve the business’s value.

When we met the owners, they were 1) skeptical of “business brokers” from their past experience, 2) even more burned out and 3) experiencing strained financial performance – a symptom of owner fatigue.

First we overcame the skepticism by diving into the history of the business, getting our arms around the current financial condition and producing a comprehensive marketing plan, approved by the sellers, before launching the business into the market. The clients commented that we “delivered more value within the first 10 minutes than the previous broker delivered all year.” I know that sounds like a self-serving statement, but it’s intended to serve as advice: Any business intermediary must fully understand the client and the client’s business to have any chance at successfully selling the business. Lack of broker preparation may contribute to the International Business Brokers Association statistic of only one in three listed businesses selling.

While investigating the financials, we discovered incorrect reporting and account classifications that resulted in a much lower recommended selling price, further disappointing the exhausted sellers.

Ultimately, only three individuals were seriously interested in the business because of the reputation the owners worked hard for 30 years to build.

Sadly, the offers supported by the market were less money than the seller would realize by liquidating the business, so that’s the transition they chose: liquidation. Avoiding a few mistakes might have resulted in a different outcome:

• Waiting too long to begin the sales process meant burnout damaged performance.

• Poor bookkeeping led to incorrect financial information, resulting in a disappointing value assessment.

• The false start with the initial business broker wasted valuable time and energy. Perform your due diligence before selecting a partner for this process. Remember: You get what you pay for, and anyone offering “free” services will not invest the resources needed to sell your business.

The sellers in this example are relieved and enjoying their newfound freedom, but proactive planning and investigation may have yielded more financial security for their Life Beyond Business.

Dave Driscoll is president of Metro Business Advisors, a mergers and acquisitions business broker, business valuation, and exit/succession planning firm helping owners of companies with revenue up to $20 million sell their most valuable asset. Reach Dave at or 314-303-5600. For more information, visit

Submitted 7 years 360 days ago
Categories: categoryValue Proposition
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