A reflection on the hopelessness of the ‘traditional’ business sales approach

The Bigger Picture In Selling Your Business

business sale prospecting letterThis letter landed on the doorstep of one of our Directors yesterday caused some discussion in the office this morning, mainly about why this is misleading and wrong.

Business owners receiving letters through the post telling them that they should sell their business right now is nothing new. The timing, coincidentally  just in time for their mailing campaign, is the first suggestion that perhaps the letter is contrived.

This is nothing new though. Sale advisors and brokers send out hundreds of thousands of these every year to business owners who are growing more and more tired by the sight of the tell tale signs, whether it is the fact they are addressed to ‘The Business Owner’, or the ‘Strictly Private and Confidential’ line in the letter window. And even if you manage to avoid the mail, others call you endlessly.

Point 1: Your Business is NOT a Commodity

Reading this, you’d think that selling a business is like selling any normal commodity. Well, in our humble opinion it’s not.

Every business is unique, every owner has a different set of circumstances to face, every business has staff, customers, partners that rely on trading with them. Every situation is different and you cannot just put a business up for sale without first thinking in detail about what the purpose of the sale is: both for the owner as well as all others affected by it.

Point 2: There is NO HURRY, in fact that’s the worst thing you can do

These mailshot brokers don’t know it’s the best time for you to sell. The right time for most businesses is not conditional on when they receive such a letter as this. It is normally after a period of sustained profitability, or if you have been through a period of preparation for sale, only then can it be considered the ‘right time’. The manufactured urgency will almost certainly be to the detriment of all parties in the deal other than the broker, who will pocket the sale commission regardless.

Given there is no rush, you should take your time and get your business fully ready for the sale process. Of course market forces and economic conditions have a part to play in the price that a business will eventually sell for, but a good business will always be attractive when taken to market.

Rushing to market early because you’ve submitted to this kind of mailshots will almost certainly not only reduce your business sale price, but also will pair you with the worst kind of business to advise you.

The role of a good sale advisor is not to deceive you into signing up with them, but rather advising you on how to get the maximum value for your business, and sometimes that means taking your time.

Point 3: This letter is NOT to you, they don’t know anything about you

I suppose we should not have expected them to easily discover that one of our Directors worked for Firm Gains, however the main issue is that all they knew about the Director is that he is a shareholder in a business trading in the UK.

Anyone can find that kind of data out and order a list from a mailing house. But the rest of the letter therefore is clearly nothing to do with his business, personal situation or even future plans.

And, given it is ‘no win, no fee’, with everything hinging on the sale commissions, it’s clear that it merely a numbers game where closing the deal is the only thing that matters.

Point 4: This is why we get up every morning

So, enough about the letter. More filler for the recycling bin. The more people that throw it away, the less effective this approach, the fewer sent out.

It spurs us on. Makes us tick. It’s the driving reason behind starting Firm Gains. We wanted to provide some balance to this kind of activity. To help business owners become more equipped so that they don’t end up committing with little or no understanding of the market, taking snap decisions, being seduced by unrealistic valuations, and ending up committing to the wrong advisors. At best the only costs is time and money. At worst it can ruin years of hard work.

So, if you are thinking about selling, then talk to us first, for free. No hard sales pitch, no valuation inflation, no smoke, no mirrors and definitely no wasteful blanket mailshots. We are the only independent advisor in the market that offers free and unbiased advice to business owners to help them get the best result.

Call us on 0333 050 8225 for a confidential conversation on preparation, exit planning and what kind of approach would best work for you.

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