Getting Paid for the Past
May 13, 2022 9:17 pm
As a Business Broker I have two objectives when selling a business. I'll briefly discuss one of those here and save the second for next week. If you're just dying to find out what it is, give me a call!
It is my job to get the owner paid for their hard work in the past. Sometimes this is easy, other times it's a more difficult proposition. I find that when a Business Owner comes to me ahead of time (think 3-5 years before they expect to sell) I have an opportunity to collaborate with them. We can clean up their books, boost margins. I can refer out to other service providers like bookkeepers, Merchant Service Providers, Part-time CEO/CFO, Tax Consultants, etc. All this is essentially free advice on my part. By doing a little legwork ahead of time we can have a much better (profitable, streamlined, strong) business to sell when the time comes.
But, that's not how it usually happens. Often, after letting a business coast for a number of years, an owner decides they want to be done. In reality, they were done years ago, but they've finally gotten around to pulling the trigger. Then, they are baffled when I present a business financial evaluation that is smaller than expected. In their mind, the business should be worth what it was years ago when they were actively managing the company. However, I can't convince any reasonable buyer that the last few years are just a fluke. The business the seller remembers doesn't exist any longer. And the longer the coasting period, the more difficult it is to recapture the value lost.
So, please, do yourself (and me!) a favor and begin a conversation. As I mentioned, advice is always free. My goal is to help you have the best business when it's time to sell. That's how you get paid. That's how I get paid. Reply to this message or pass it along to someone you think could benefit.
As always, I look forward to hearing form you soon!
Happy Friday,
Josh
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JOSH GRODE WOLTERS, MA, MBA, BTS
Business Broker | M&A Advisor
· $23M closed transactions ·
Sioux Falls • Rapid City • Des Moines
2121 W 63rd Pl, Suite 100
Sioux Falls, SD 57108
