Good Communication Pays Off, Again

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communicationI’m sure you can think of a couple of times (more like hundreds) when you and a very important person in your life had a miscommunication about … when you would be home for dinner, how much your assistance was needed to clean toilets prior to a dinner party (geez I mowed the lawn!), household budget, etc., etc. That miscommunication is innocent and without malice, but it doesn’t keep you from getting into hot water. Does it?

Clear communication is important in buying and selling businesses too. To keep everyone on the same page, we start with a target closing date, set time limits for due diligence, and applying for financing. However, this is just the beginning. The process can take many twists and turns, so whether you are a buyer or seller or broker, it is critical to keep everyone abreast of current activities even if that means agreeing to adjust the target close date.

We just had a closing on a deal that took over 6 months to get completed. There were plenty of times that the various parties got nervous, but the banker, buyer, seller, broker, and attorneys stayed connected. Relationships are stronger and transitions are smoother when there is open communication between all parties.

Contact your Apex Business Advisor to answer your questions regarding buying or selling a business.

Value Drivers: Business Operational System

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make it easyMost people looking for a business to buy need a reason to pull the trigger. If the transition is easy – that’s one of the biggest reasons to pull the trigger, quit the job, grab the 401k, and jump into the deal. If you have set your business up to be easily managed, have operational policies for the employees to follow, financial and operational reporting is in place, and sales management systems and client database are up to date, then the buyer will be able to picture themselves in the owner’s seat.

The typical buyer has management experience, finance experience, sales, or marketing experience, but probably does not have all the skills necessary (on day one) to run your business. Most buyers are strong enough to learn as they go and make it work. However, in order to attract more buyers to your business, you need to make it appealing to a wide range of personalities and skill sets. Also, you have to remember that there may be a spouse involved in the decision to buy your business and they will want to be secure with their husband’s or wife’s desire to leave a job and buy your business. Set your business up with the written systems mentioned above and you will make that decision much easier for the buyer and their family.

The impact of this on the price of the business is a little more difficult to calculate. But, the time it takes to sell will no doubt be shorter, there will be less need to negotiate your price, and you will probably have multiple interested buyers from whom to choose. By the way, you might find that having written operational systems will actually improve your business!

Congratulations to Jay Lehenbauer

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JayL50505075Congratulations to Jay Lehenbauer for seven years as a successful Apex Business Advisor!
Jay joined Apex in 2005, has completed some of our largest transactions, and has been one of our top brokers for several years. He is dedicated to his clients and always strives to be the best intermediary possible. As proof of his dedication, Jay has completed the necessary education and training to be a Certified Business Intermediary which only a small percentage of brokers ever complete.

My sincere appreciation goes out to Jay, because it’s people like him that make Apex Business Advisors a leader in the brokerage industry and such a great place to work!