6 Things Yogi Berra CanTeach You About Selling
Your Business
"We Made TooMany Wrong
Mistakes"
Selling a small business iscomplicated. These key concepts -brought to you by Yogi Berra - willhelp you simplify the process.
For many entrepreneurs the processcan seem hopelessly complicated.
When faced with a daunting tasksometimes the best thing to do is to narrowyour focus. Concentrate on just a few core
ideas and actions.
These key concepts - brought to you byYogi Berra - will help you do just that.
Selling a business is
complicated
"90 PercentOf ThisGame IsHalf Mental"
Selling your business can be atense, uncertain process - so beready for an emotional roller
coaster.
Be mentally prepared for some uncomfortablesituations - like when a buyer criticizes you and your
business.
Even the buyer who loves everything about yourbusiness will try to lower the price as much as
possible by looking for faults.
Buying a business is risky.
Naturally a buyer will work to lower their risk as muchas possible. So throughout the process the buyer willalways ask themselves: “What could go wrong?”
"We MadeToo Many
WrongMistakes"
You will make mistakes.
Most of them you can
recover from.
The one mistake you can
never recover from is
trying to hide negative
facts about your
business.
Buyers aren’t stupid. If
your business is saddled
with serious debt,
regulatory challenges or
pending lawsuits
..........the buyer will find
out.
There is no problem
facing your business that
will kill your sale faster
than the loss of trust you
will experience when the
buyer uncovers
something you were
trying to hide.
"It Ain't Over Til It's Over"
No matter how
smoothly the deal
has gone, “it ain’t
over” until the buyer
and her advisers get
their chance to put
your business under
the microscope and
conduct their
"due diligence".
The term "due diligence" refers to the period during
which the buyer has the opportunity to investigate
your business completely. Again, their focus will be
on what might be wrong with the business.
Conduct yourself throughout the selling process
knowing up front that every claim you make will be
verified before any money changes hands.
"Little League Baseballis a very good thingbecause it keeps the
parents off the streets"
"Little League Baseballis a very good thingbecasue it keeps the
parents off the streets"
This quote has nothingto do with selling your
business, I justthought it was funny.
“A Nickel Ain’t WorthA Dime Anymore”
Hard to argue with Yogi’s point here. One amount ofmoney is not worth a different amount of money.
When it comes to valuing a business there are a lot ofnumbers you can consider.
But the number a buyer will care about more than allthe others combined is “Owner’s Benefit”.
The "owner’s benefit" is the amount of money thebusiness creates for its owner on an annual basis.Here’s the equation for coming up with your owner's
benefit:
Whatever the standard method for valuation is in yourindustry, the buyer will be interested in, and motivated
by, the Owner's Benefit.
Annual Pretax Profit + Owner's Salary + Owner'sPerks/Benefits + Interest + Depreciation
“When YouCome To A ForkIn The Road,Take It”
If you are lucky, eventually you will get an offer froma qualified buyer.......................
If you are lucky, eventually you will get an offer froma qualified buyer.......................
And it will probably be for less money than youimagined in your dreams
You will have to make a decision - do you accept anoffer that is just “okay” or do you hold out for more?
You will have to make a decision - do you accept anoffer that is just “okay” or do you hold out for more?
Of course your decision will be influenced bywhether or not you have any other viable prospects.
“The Future Ain’t What It Used To Be”
Yogi Berra has been famousfor living in the moment, fornever worrying about the
future.
But for the person buyingyour business the future is all
they will think about.
You can and should tout your history of growth, profits andhappy customers. But the buyer is interested in the future not the
past.
In order for someone to invest their life savings in your business,they must have a reasonable expectation that they can be as
successful as you have been.
The more your business has depended on your uniqueabilities and your personal relationships with customers
............................... the more a buyer will doubt your level of successcan be sustained once you are gone.
Buyers always have the option to do nothing. And if they can’tconfidently expect to continue your level of success, that is what
they will do. Nothing.
Remember:
Have you been trying to sell yourbusiness but met with frustration anddisappointment?
Read "Ten Thing You Need To KnowToday If You Want To Sell YourBusiness Tomorrow" to learn the factsabout what it will take to sell yourbusiness.
Click the book cover to download .....it's free!
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