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Mistake #2 -
Waiting until you're forced to Sell
Business owners
often avoid planning how they will transfer their business to
others. Eventually, some life event such as death or disability
compels action.
A project in the
early days of Centering Corporation showed us the consequences
of waiting until you're forced to sell. A business owner hired
us to help him sell his business and said that he was ill, that
he wouldn't be coming to the business any more, and that he
would probably die in the near future. His prediction proved
accurate; he died soon after Centering was hired.
Selling that
business was difficult, and the selling price was quite a bit
less than we had hoped it would be. At the time, we were angry.
We thought that potential buyers were taking unfair advantage.
Today we have the
experience to understand that type of situation better. Buyers
weren't taking advantage of the seller's family. They were being
realistic. They knew that if they bought the business they
wouldn't have as much support as they'd like. They wouldn't have
any advice from the late owner and they wouldn't have his help
in dealing with employee or customer issues. Without the former
owner, buying the business would be a lot riskier. To make up
for that increased risk they had to offer a lower price for the
business.
An important part
of Centering's work is helping business owners prepare their
businesses for an eventual sale. If the proper work has been
done beforehand, the project can be completed quickly - even at
short notice - and can result in the best possible sale price.
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