This is a story from an associate of mine Burt.
He is a business value building coach with www.Lohoff-Gaida.com
He tells a story about selling his house and I wrap it up with comparing it to selling a business and why you need to know your Business GPA Score.
Here is Burt’s Story:
Five years ago, almost on a whim, my spouse and I decided to leave Chicago and move to Charlotte, North Carolina while our children were still young.
When purchasing a house, I learned that the most important criteria was: location, location, location, and we listened.
We purchased a great house in a northern suburb of Chicago back in 1997. With only a 10-minute walk from Lake Michigan and about the same distance to our town square, it had the location part for sure.
Although the market was soft in 2011, I felt, because of the location our house would sell quickly, and fetch a good price. Guess what ….. It didn’t.
There was a lot of buzz resulting in many showings. But no offers. Not even low ball offers.
Loads of showings, but no offers. Talk about frustrating!
After reviewing the feedback from showings, we listened and learned.
Even though the house was well maintained, it was outdated and no-one was willing to buy the house and work on updating it.
So, we took it off the market for a short while and updated it.
- We painted the kitchen and switched out some of the appliances,
- We replaced the windows
- Replaced the roof.
- We re-did the bathrooms, etc.
- Nothing structural, just updating and cosmetics.
As soon as we put it back on the market, we had multiple offers and sold it at the FULL asking price.
What does this have to do with selling a business?
If you take any 100 businesses that are up for sale,
- 4 out of 100 will sell at the full asking price,
- 16 will sell at a 30% – 50% discount, and
- 80 of them will NEVER sell.
Wondering why such DISMAL statistics?
Just like a house, no-one is willing to buy a business and go through the time, expense and angst of updating a business.
They just want to move in.
According to the US Census Bureau there are presently 75 million Baby Boomers in America. Many of them are business owners thinking of retiring. And many of them want to cash in on the businesses that they have built over the past 20-30 years.
In a report from The Mead Consulting Group it is estimated that there are 9.5 million small-to-mid-size private businesses with annual revenue between $1 million to $75 million.
Typically these firms have 2 to 500 full-time employees. 65% to 75% of these businesses will go up for sale in the next 5-10 years but only 20% of them will actually find a buyer.
We are about to see a baby boomer business transition bubble, and the competition to sell a business is going to get fierce!
It took Bert 2.5 years to sell his house in Chicago. Had he LISTENED to a knowledgeable broker in the first place, he would have avoided a lot of pain, frustration and angst, and been able to move to North Carolina sooner.
Thousands of business owners are going to have a reality check when they decide to sell. About 80% of them will end up closing their doors with shattered dreams, and will be forced to cut coupons just to make ends meet.
It’s a shame and it doesn’t need to be that way.
You need make sure your company stands out from the rest, “update” your company, and have a Business Exit Strategy in place.
How can they do this?
It all starts with a FREE 11 minute on-line questionnaire.
There is No Cost To You.
You will receive your Business GPA Score, complete with a brief description of your businesses strengths and weaknesses.
Get your Business GPA Score Today. After you take the survey, contact me and we can design a plan of action.
Other articles that might interest you:
Oliver Lazenby: “Way of Retiring baby boomers put their businesses on the market”, The Bellingham Business Journal, Sept. 28, 2015: http://www.theheraldbusinessjournal.com/article/20150928/BIZ/150929951
US Census Bureau, June 25, 2015: “Millennials Outnumber Baby Boomers and Are Far more Diverse”, https://www.census.gov/newsroom/press-releases/2015/cb15-113.html
Stacy Cowley: Baby Boomers Ready to Sell Businesses to the Next Generation, NY Times, Aug. 19, 2015 http://www.nytimes.com/2015/08/20/business/smallbusiness/baby-boomers-ready-to-sell-businesses-to-the-next-generation.html?_r=0
The Mead Consulting Group: “Issues For Growth”, http://www.meadconsultinggroup.com/showNews2.php?id=58