Here’s a revolutionary insight:
Your business is special. It is different than any other business there is, has been or will be. It’s better than sliced bread, smart phones and cold beer put together. And when it comes time to sell it, the common rules, guidelines and deal strategies don’t apply. Because it’s better than all those other businesses.
You think I’m making this up? Think again. The above may have a little hyperbole (a smidgen shall we say), but it sums up how owners feel about their business when it comes time to set a price.
- “We lost money for three years straight, made money last year, so last year is the only year to consider in valuing the company.”
- “I know most industries include working capital in the price but my industry is not like others (so I get to keep all the working capital; you get a quasi-start-up).”
- “You don’t understand, it’s not really a risk that one customer accounts for 79% of our sales, they love us.”
- “We have great processes, just do business like we do and you’ll be fine.” Said to a buyer who changed the culture, salvaged 25% of the customers who were about to leave, and grew the business 50% in one year.
I hope you can see through my sarcasm. While I admire the pride owners have in their businesses, there are standard ranges, policies and deal guidelines that are followed. We’re all exceptions, all different, and yet all similar when it comes time to valuation, terms, and the selling process.
“The neurotic has problems, the psychotic has solutions.” Thomas Szasz
