What do high school popularity contests and selling your business have in common? That’s a reflection that any entrepreneur interested in selling out should carefully think of.
I believe that most people are shaped by their high school years. It’s a brutal place as the kids are merciless. The winner takes all while anyone recognized, as a loser can never shake off that bad reputation even twenty years after school in reunions.
In high schools, once you’re cool, everybody wants to be your friend and you can pretty much dictate how things are going to play out. You are in a position of power and everyone knows it from the school principal to the youngest student. You get the best spot in the school bus, in class and it’s easier to get people to help you out with homework.
A perceived loser has to fight everyday and most times silently. The discrimination is horrible and he or she can never get anything done easily because very few pupils will dare tarnish their own reputations by associating with him or her. That’s the worst spot to be in!
Selling your business is exactly the same thing. If you’re not sitting on a winner, not only will you have trouble selling it a the price you feel that you deserve but attracting brokers and buyers will also be a near impossibility.
Business buyers want value. Very few are ever interested in buying a loser and turning it into a winner. They want value not only for the present but the future.
Why are you selling your business?
That’s the very first question that a business buyer is going to ask. These are people who know that entrepreneurs don’t simply let go of their babies. Your answer to that question will usually tell them whether they should proceed or thank you and say goodbye.
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I am willing to bet that entrepreneurs who eventually manage to sell their business would have gotten a better deal if the buyers would have approached them without being listed as “for sale”)
Entrepreneurs who are sitting on winning businesses do not sell them. It would not make sense. Would be sitting on a goldmine and then sell it? Nope. Unless there was something very fishy with that goldmine. And that what buyers want to find out.
The first rule if you’re interested in selling your business is that you never approach buyers. Buyers approach you. Your job is to grow a winning business and they shall come. These guys are entrepreneurs too and are like bees to honey: they can smell success and opportunity from miles away!
I have sold a business before. I knew it was a prized item because I had four buyers that sent me dozens of emails in a period of two weeks when I was away. I got an offer that was worthwhile and sold it. I seriously doubt that I’d gotten the same amount had I decided to sell the business.
Remember this important consideration when selling your business. If you made the first move, you will not win. If the buyer made the first move, you’ll most certainly will.
Just like in high school. To win the attention and affection of everybody, the cool kids don’t go begging for them. They just focus on being cool and everybody comes to befriend them. Remember that when thinking of selling your business.