Most successful entrepreneurs are self-driven, self-reliant and creative. We learn to increase sales and our number of customers as well as save money and increase profits. We are confident and learn to do things because there is no one else to do them. But just because you can do it yourself, should you?
Your pest management business is likely your largest and most valued asset. Is selling your largest asset a “do-it-yourself” project? Selling a business can be complicated, often involving all aspects of the business — human resources, IT, operations, finance, real estate, your fleet of vehicles and so on. Experience in selling your business literally can be the difference between hundreds of thousands or millions of realized dollars. You can benefit greatly from bringing in experts to help you throughout the selling process.
What follows are five reasons why I believe you shouldn’t attempt to sell your pest management business on your own.
1. Maintaining Confidentiality
This is a basic component of any sale. Maintaining confidentiality is essential when selling your business. If you represent yourself, how will you maintain confidentiality and vet potential buyers without revealing your identity? You can’t. And the more people who know you are selling the more vulnerable your business becomes and the less it ultimately will be worth. It’s critical that your employees, customers or competitors don’t know you’re selling. You need an intermediary between you and the buyer — a representative who is not involved with the business and qualifies potential buyers.
2. Finding the Best Buyer
Often a business owner sells to a buyer who approaches him — but that might not be your best option. In many cases, they are savvy business owners and experienced mergers and acquisitions or business development executives looking to buy a business on the cheap. These savvy, experienced, educated buyers want you alone and without representation. Why? It makes you a “soft target.” Having representation levels the playing field and ensures you’re negotiating an appropriate and premium offer for your company.
3. Focus on Running Your Pest control Business
Selling a business takes a LOT of time! Preparing the business for sale, including creating marketing presentations, attending buyer meetings, performing due diligence, and reviewing contracts/supporting documents all take time. Dealing with multiple buyers takes time. Meanwhile, you’re trying to run the business and live your life. From preparation to close, the average business takes 4 to 12 months to sell. Do you really have the extra time to spend hours, days, weeks and months selling your business? While you are doing that, is your business suffering? If your business suffers during the process, offers likely will decrease as well. Buyers want the business to be healthy and growing versus fragile and distracted.
4. Expertise and Experience
Selling a business requires many different types of expertise and skill sets. You need to have good relationships and contacts with potential buyers, a deep understanding of financial statements and how businesses are valued, the legal process involved when a business is sold, when to involve an experienced merger and acquisition (M&A) attorney and more. You may have a great attorney and accountant, but they do not have the same expertise as an experienced business consultant or representative when it comes to selling a business. Business consultants, CPAs and attorneys all have different educations, experiences, rules and ethics when involved in an acquisition. The most lucrative deals occur when sellers assemble a comprehensive team of experts that market, negotiate and sell the business.
5. Unintended Consequences
They have a saying in poker that the best way to conceal your hand is with your face. If you don’t have business acquisition experience (buying AND selling), high level, slow incubation sales experience, then it’s easy to unintentionally give away your hand. The result is that buyers will find opportunities to pay less for your business. The right representative will be motivated and involved but not emotional about the sale. Since it is a business representative’s job to pursue buyers, earnestly following up on every conversation doesn’t send the same message it would if coming directly from the seller. Further, buyers will be required to deal with the representative you hire.
FINAL THOUGHTS. Mergers and acquisitions are complex. Successful transactions require expertise well beyond what the average business owner has. Your M&A representative will help prepare the business for all aspects of the transaction; they are your experienced resource in all phases. They market you and the business, they negotiate on your behalf, support due diligence, closing and integration. If you have little or no experience in the process of selling, why try to do it alone?
The author is president of Kemp Anderson Consulting. Contact him at www.kempanderson.com.