Challenges of Selling
I have heard it said that when you go looking for only one item, you could only possibly find one item that will suffice. If I go looking for a ticket to the Stanley Cup finals on the red line in section 101-row N, seat 10, there is only one item that fits that description. In addition, the chances of finding that item available will be very slim. However, if I go looking for a ticket to the Stanley Cup finals around the red line, 10 rows up, the possibility of finding a match rises significantly. When a seller looks at a variety of options, the possibility of closing a sale increases dramatically and there is a high likelihood to find a deal and a buyer that will fit the situation.
It is very rare that a seller lists a business for sale and a buyer purchases that business for that listed price in cash. I am not saying that it does not happen, because it does; it is just infrequent. Most sales require creativity by all parties. The sale may require bank financing, seller financing, a seller on full hold back (no payments to the seller for a specific period of time), share purchase vesting, floor inventory, financing with a balloon, or some other unique deal strategy. A skilled business intermediary can help a seller and a buyer navigate this process, with the goal of each party getting as much of what they would like as is possible.
We recently assisted a company in the sale of their specialty retail store. The seller was motivated and had a very nice location, good traffic counts, strong business reputation, and an engaged client base. The business had many interested parties but the inventory costs were significant. Because the inventory costs were great, we worked with the seller to develop several options to assist a buyer in acquiring the business. The business was offered as follows:
- All cash at a slight discount on the brokers opinion of value of the business plus inventory
- Full price, plus a premium for the seller to carry a majority of the sale price
- A lower sale price for the business without the inventory, inventory to be sold as floor inventory and paid to the seller when the items were purchased by third-parties
The process took over one year to close, so it was not super-fast. However, the business was sold, a happy buyer is in place, and a thankful seller has transitioned out of the business. Since we have plenty of experience in deal structuring, we were able to assist our seller with the sales process and provide solutions to issues and challenges as they occurred in the pre-sale and sale cycle. A quality business intermediary will be able to provide a level of knowledge and the tools to smooth out a sale, regardless of the challenges. Our strategy helped the seller and buyer achieve their goals and we met our standard of care, a win-win for all.
About the Author
Call Brent 480-250-6559 or via email firstname.lastname@example.org, to get detailed assistance in building, streamlining and developing your business sales strategy.
Brent is the Founder of BounceU a children’s entertainment franchise system, entrepreneur, Certified Public Accountant licensed in CA, and Business Broker in the Phoenix area. He resides in Gilbert, Arizona with his wife and children. Brent is an avid cyclist and outdoor enthusiast.