MYTH # 1- there are
no buyers out there - the economy has affected
the business for sale environment as much as any
MYTH # 2- I have to
sell my real estate with the business.
MYTH # 3- I have to
hold the loan because lenders are not lending
for small business acquisitions.
MYTH # 4- it takes
between 15 months - 2 years to sell a business.
MYTH # 5- using
comps is the best way to determine my business
MYTH # 6- the most
common way of determining my business value is
by gross sales multipliers.
This statement is true
as we see more values determined by gross
sales rules than other formulas. However
gross sales tells us - and buyers - nothing
about the actual value. That is because the
value should be based on cash flow + assets
as we do on our Business Market Valuations.
Not long ago we valued two different machine
shops doing basically the same thing. One
had annual sales of 2 million and the other
$800,000. But the shop with lower sales had
a greater value because of a better cash
flow - the larger company had more expenses.
MYTH # 7- attorneys
are not needed in the sales process.
MYTH # 8-
confidentiality may seem important but I want
everyone knowing I am selling to increase my
MYTH # 9- business
owners should ask for at least 5 references from
the broker of past businesses sold.
MYTH # 10- insisting
on non-exclusive listing agreements allows me to
have all brokers selling my business.