CHOOSING THE WRONG ADVISOR CAN COST YOU TIME AND MONEY
National Broker Average: 11% – 25%
My Average: 90+%
A True Story
A man and his wife called me about selling their pharmacy.
After analyzing their previous 3 years of tax returns, I calculated a market value based on the different types of buyers they would be likely to attract, assuming we started a bidding war between them. I let them know exactly the range of what the business was worth in the market, what they could expect and when they could expect to close. I could go into detail about how that call went, but the bottom line is they thought the business was worth more because another broker wanted to win their business and stated a price that was too high.
The Stakes Are High
After I informed the seller of their target valuation, they told me they would “think about it”. I didn’t hear from them for almost 2 years…but they did get back to me.
“Aaron can you help us? We hired a broker, and we have been at this for almost 2 years and our business still isn’t sold, and we really need to sell it.”
I kindly asked “Why did you hire another broker?” She said “Because we thought that we could get more money and this broker told us that the worst that could happen is they would say no and give us a lower price.” I gave her very candid and frank advice, and explained: “If you go to the market with too high of a price, the banks won’t finance the buyer. And the debt service for the prospective buyers is way too high, making your company unattractive for both banks and buyers. The way your old business broker priced it out, the buyer would be paying an exorbitant amount of money to the bank loan in order to acquire your business, and they can find a better opportunity elsewhere. In addition, this sends the signal to prospective buyers that you have unreasonable expectations and will be difficult to deal with, so many don’t even respond to your store. A good business broker would have never led you down this path!”
Choosing the Wrong Business Broker Hurts
The sellers in this true story, a husband and wife, are worn out and now they had health problems. During this time, Sales and profits dropped, making the business worth less than when they started the process…all because they chose the wrong business broker, someone who didn’t know the market and just didn’t deliver results.
We won’t let this happen to you, make Colony RX part of your success strategy from the start and you will potentially save years of heartache. Call us today for a free, no-obligation discussion.