Buyer Beware: Don’t Be a Victim of Business Valuation Seminar Fraud
Beware of those people and companies who offer consulting and valuation services for huge up-front fees. We usually hear about these scams after they’ve transpired and business owners are either really mad or unaware of what they just got themselves into.
There are legitimate Mergers and Acquisition firms who typically get their business from referrals and basic marketing. Then there are companies (fortunately very few) who love to hold seminars on business valuation for the express purpose of selling a business valuation for their invited guests.
This is a hard-core, one-call close type event that will always snare a few very excited and unsuspecting victims. If you didn’t bite the first time, rest assured you will get a call in a couple months and they’ll try again to take advantage of you.
Their hook is getting a business owner to believe that their business is worth as much or more than the owner believes.
For the pleasure of getting a nice printed document, there will be a fee of $20,000 to over $50,000. The price of the valuation really depends on how good the salesman is and how much excitement they’re able to build in the target.
They will offer a huge “discount” to get the owner’s commitment right then. They tell their targets that they don’t usually work with such small businesses, but will make an exception because they really like the owner/business.
These activities are harmful to the business owner and waste time and money. Even worse, owners will receive exaggerated business values that will only further confuse them down the line.
It also harms the Business Advisor/Broker industry. We’re not all the same. At Apex we believe in telling the truth about business value. Of course we try to get as much for the business as possible, but the goal is to sell the business at what the market will actually accept.
With the other scam valuation companies, they have no intention of trying to sell your business. They already made their money!
