When a business owner is thinking of selling their business in Tampa they often ask us how often it takes to sell their business? Intuitively, we always used to say it took 8 months to sell a business but the question should be why? Are there reasons for such a long duration?
Well yes there are reasons. First sellers most of the time liken the sale of a business to what their experience has been when selling other items and frankly they assume its much like selling a house. Which in turn assumes that there is a existing marketplace of known metrics and exchanges and where financing is readily available. As a result they make faulty assumptions and decisions about how to market their sale.
- THEY OVERPRICE: Overpricing a business to the market is a common error. Sellers listen to people without access to the market comps and or who offer opinions not soundly based in valuation or use multiples based on ebitda vs owner benefit resulting in overpricing. The net result is that broker and buyer look right past your deal because you send a bad signal of unreasonableness or ignorance when you price incorrectly.
2. THEY DO NOT MARKET IN THE MARKET: They list with a realtor or as a For Sale By Owner (FISBO) resulting in little exposure and then when coupled with overpricing are shocked at the lack of activity. Your business in order to sell needs to be in the marketplace being exposed to as many buyers as humanely possible.