American Business Brokers & Advisors - December 2019

American Business Brokers & Advisor Founder & President PROFESSIONAL INTERMEDIARY & MARKET MAKER FOR PRIVATELY HELD COMPANIES Author of ‘The Art of Buying and Selling a Convenience Store’ & ‘Selling with Certainty’ Involved in the Sale of 750+ Businesses Advisor • Consultant • Speaker

DECEMBER 2019

WWW.TERRYMONROE.COM

800.805.9575

The Biggest Misconception About What I Do

“Trying to evaluate the state of a business is like trying to hold onto a pile of Jell-O—you have tomake sure nothing important slips through your fingers!”

When I ask myself, “What is the biggest misconception my clients have about my business?” I can sum it up like this: They think I’m a realtor. They think I’m someone who makes a listing for their business, snaps a few photos of the place to put online, and waits for a buyer. This couldn’t be further from the truth. Back when I was in my early 20s, I used to sell homes before I started buying and selling businesses valued between $10 million and $120 million. So, you can trust me when I say you can’t compare selling a multimillion-dollar business to selling a $300,000 home; my profession and that of a realtor couldn’t be more different. Let me explain. When someone wants to sell a house and a realtor finds people who might want to buy it, he or she is going to consider a few different aspects of the property. First, they’ll make sure the roof and the foundation are in good condition. Then, they’ll look at the walls, the electrical systems, the plumbing, and the carpet, followed by a million other little things. There’s a very systematic pecking order in place when evaluating a house, and this is true for evaluating the state of a business as well. But that’s where the similarities stop. All the things a realtor may consider about a house are, in a sense, static characteristics. Sure, components of a house will need replacing every now and again, but for all intents and purposes, a house can stand unchanged for years, even decades. Businesses, on the other hand, are always changing — they’re more than just a building. If you take a family out of a house, the house doesn’t change. But, if you take away a business’s employees, or tweak their assets, the whole business can fundamentally change. Trying to evaluate the state of a business is like trying to hold onto a pile of Jell-O — you have to make sure nothing important slips through your fingers! I’m Not a Real Estate Broker!

When a client wants me to evaluate their business, I look at their finances, their employees, the quality of the assets of the business, the demographics around the business, and any number of things that could change at a moment’s notice, and I try to discern whether the business is trending generally upward or downward. When I present one of these two conclusions to a client regarding their business, it usually results in another, smaller misconception. When someone’s business is trending upward, they usually want to keep it and nurture that success. But, if their business is trending downward, their first impulse is to sell. It seems logical, but buyers are more likely to buy a successful business than a failing one, so it actually makes more sense to sell a business when it’s doing well than when it’s failing. Unfortunately, in my experience, many have hung onto their businesses for too long, only to see them fail under their ownership. That’s not to say I have much power to stop any of that from happening. Because, when it comes right down to it, I’m not really in the business of brokering sales — at least not first and foremost. I’m in the business of helping business owners make informed decisions. Many of my clients come to me just looking for my take on their business. They trust I’ll be able to give them new information that can help them decide their next move. I don’t hop in only after you’ve decided to sell — I can steer you straight right from the start and help you to be the most successful business owner you can be. To learn exactly what I do, check out my latest book “Selling with Certainty” available on Amazon or TerryMonroe. com. In the book, I outline the entire process from beginning to end on how to prepare and ultimately sell one’s business for the highest value.

–Terry Monroe

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800.805.9575

WWW.TERRYMONROE.COM

www.terrymonroe.com

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