Stress makes it tougher to sell business

Robert Lewis 12:16 a.m. EST January 24, 2015

Issues of business growth and management are quite similar in most types of businesses but they become more apparent — and impactful — in smaller, entrepreneurial or family-owned businesses.

Often the entrepreneurial business is run by the person who formed or acquired it, and now finds that everything falls on those shoulders.

That leads to a concentration of control and decision-making on one or a few people and the results can be seen throughout the organization. It often means the owners work extraordinary hours, take little time off and often justify it as “that’s the way this business is.”

This situation leads to some stress throughout the organization as the owners work long and hard.

Meanwhile, the staff lacks growth opportunities, which often leads to passive disengagement or higher turnovers.

Another significant effect of this situation is the impact it will have on the ultimate transfer of the business — the sellability factor.

Business brokers and leadership development gurus understand that a business that is run in this way is more stressful and tougher to sell. The more the business depends on you, the less anyone else will be interested in buying it.

It is also quite likely that a business managed like this is ongoingly less profitable and less beneficial to the owner.

Or, when it comes time to sell, it may seem appealing to some strategic buyers who may see a business with a good product or service but will offer a lower price because the buyer would have to work harder to replace you.

Either way, the owner has lost out because of higher stress involved to cover more bases and expansion didn’t happen for lack skilled staff to do it.

Again profit also suffers. A buyer would see a less manageable company with less profits.

Either way, it is advisable to do a health check-up on the viability of your business to determine if your internal resources are strong enough to command a price that would fit your expectations.

Most businesses fail to sell for a price that matches the owner’s expectation for that reason.

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For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Edison Avenue website at www.EdisonAvenue.com and my personal website at www.buysellflbiz.com.