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Send  Share  RSS  Twitter  15 Feb 2010

VENTURES: Difficulties In Selling A Business

 



Recent Western Cape Business News

SOME business owners attempt to sell their businesses themselves, and they soon find that the sale of a business is prohibitively difficult to accomplish without a broker (or someone) acting as an intermediary for many of the following reasons:

The seller often doesn’t know how to properly value the business.

The seller often doesn’t know how to present the business in its best light from a buyer’s prospective.

The seller is usually unable to efficiently attract qualified buyers to the business and at the same time maintain confidentiality that the business is for sale from employees, customers, and competitors.

The seller is frequently unable to judge a buyer’s seriousness; much time can be wasted by sellers dealing with “lookers.” Many potential buyers are victims of wishful thinking and they don’t have the financial or intestinal ability to complete the deal.

The seller is unable to create a competitive atmosphere among potential buyers.

The seller sometimes doesn’t know how to evaluate offers as to their full value or how to financially structure the business sale to make the business as attractive as possible to a potential buyer.

The buyer basically doesn’t trust the seller or the information provided (and rightly so in many cases).

The buyer’s and seller’s interests tend to polarize along rigid, opposing lines. They are natural adversaries, and there is no middleman to propose compromise.

The buyer and seller generally don’t know how to arrange financing for the buyer or arrange payout security for the seller.

The buyer and seller almost always don’t know how to bring a transaction to a closing.

Many sellers recognise the problems of attempting to sell their business without a competent broker, and as a result they look for help,” says Peter de Bruin of Triangle Broking Services, based in Cape Town.

The friendly neighbourhood real estate agent is always ready to take a listing for a business.

It may soon become apparent to the seller that the agent may know something about listing residential or even commercial real estate, but has very little knowledge about the workings of a business and doesn’t have the unique skills and information needed to properly represent an operating business for sale, de Bruin says.


 
 
 
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