The Sunbelt New Mexico Blog
Sellers are just like everyone else in that they can make mistakes. In this article, we’ll explore some of the most common mistakes that we see along with some of the repercussions.
1. Not Seeing the Buyer’s Point of View
The first major mistake that sellers make is that they simply fail to look at the situation from the buyer’s perspective. One of the smartest moves any seller can make is to step back and ask themselves two key questions.
“What information would I expect to see if I was thinking about buying this business?
“Would I trust the information being presented to me if I was the buyer?”
While there are many other questions sellers can ask to help reframe their thinking, these two simple questions can orient a seller’s thinking towards a buyer’s perspective. Additionally, investing the time to understand the buyer’s position can help avoid a range of problems and help smooth out the negotiation process.
2. Neglecting the Business During the Sales Process
Another seller mistake we see is that the seller neglects the business during the sales process. This can have significant negative long-term consequences. Sellers must understand that they must maintain the day-to-day operations as though the business is still theirs. The old saying, “Don’t count your chickens before they’ve hatched,” most definitely applies to selling any business. Business deals fall apart all the time. This is true from small deals to corporate acquisitions.
3. Overall Lack of Preparation
Any seller who is truly serious about selling his or her business will have all of their documentation available and well organized. This list would include financial records, environmental studies, business forecasts and more. It is important to make a good impression and convey to prospective buyers that a business is well organized and ready to be sold. Disorganization on any level could make prospective buyers worry that the business isn’t being operated in a professional manner.
4. Holding Misconceptions Around a Business’ Value
Finally, a real “deal killer” can be when sellers don’t understand (or have a mental block) concerning the real value of their business. This issue can lead many business owners to set a price that is simply too high or even completely unrealistic. Many sellers have put years of blood, sweat and tears into a business. Learning that their business isn’t as valuable as they had hoped can be an emotional, psychological and financial blow all in one. But sellers also have to adjust to the realities of what the market will bear.
Avoiding seller pitfalls is incredibly important. Working with a skilled and proven business broker or M&A advisor is a way for buyers and sellers alike to avoid an array of significant problems that could otherwise arise.
The post Four Common Seller Mistakes appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
A recent Economist article titled “Countering the Tyranny of the Clock” explores our changing relations to time as work becomes more flexible. A little philosophical? In fact, it’s super pragmatic!
“Flexible working existed well before the pandemic. But it only offered employees the ability to choose when in the day they worked their allotted hours,” writes Bartleby. “Remote working has brought a greater degree of freedom.”
Rather than an unraveling of work ethic when work is removed from strict office routines, we’re actually seeing people coming together and doing more. Slack conducted a survey of 4,700 people working from home to determine responses to flexible work schedules. The results were extremely positive. Only 12% of workers wanted to return to a “normal,” pre-pandemic schedule. Respondents indicated improved productivity and engagement. Interestingly, Bartleby points out, “flexible workers scored more highly on a sense of ‘belonging’ to their organization than those on a nine-to-five schedule.”
Employee engagement is a hot topic in workplace research. It correlates positively to improvements in service, sales, quality, safety, retention, and profit and share holder return. If productivity and work culture camaraderie are on the rise, we might consider how to sustain this unexpected boost.
The link between independence and engagement seems paradoxical. But people enjoy working to their own rhythm–and do it pretty well. “Few have the ability to concentrate solidly for eight hours at a stretch,” observes Bartleby. “There are points in the day where people are tempted to stare out of the window or go for a walk; these may be moments when they find inspiration or recharge themselves for the next task.” Employees working at their own pace may bring more enthusiasm and focus to their own work as well as their team’s.
The Economist reflections agree with another study on work from home, conducted by researchers at Harvard Business School, MIT Media Lab, and McCombs School of Business at the University of Texas at Austin. That study found that job satisfaction and engagement, after an initial dip, have recovered and even increased.
Ironically, the catch to flexible working hours actually seems to be people working too much. “In the weeks immediately after the lockdown began, only half of employees were able to maintain a 10-hour workday or less, whereas nearly 80% had been able to do so previously. These patterns have started to trend back to pre-lockdown levels, although the workdays are still 10% to 20% longer on average,” according to the Harvard, MIT, and UT Austin study.
If you’re managing a team remotely, modeling perspective is a powerful way to keep your work culture energized and sane–even at a distance. Clear communication, effective collaboration/project management tech, and organized work plans (for yourself and for your team) go a long way. But helping your team not over do it is not a bad problem to have! Can your business hold onto some of the workplace flexibility of this year for higher performance moving forward?
Selling a business isn’t always 100% about the price. It is not like selling a house where typically the most important factor is who places the highest offer. In the end, if the seller is to achieve the most optimal results, there are other variables that should be considered.
The idea of selling to a competitor is one that seems attractive to many business owners. After all, a competitor has the built-in advantage of understanding the business and thus can theoretically understand the value of the business better than an outsider. But while this point is quite valid, selling to a competitor comes with its own problems. Selling means disclosing a great deal of confidential information, and that could prove to be very risky if the deal were to fall apart.
A second avenue that sellers will often explore is selling to a financial buyer. A financial buyer is likely not to be a competitor. But on the downside, a financial buyer may be unwilling to pay the seller’s price. It is important to remember that a financial buyer is considering buying the business with the intention of selling it for a profit within a few years.
There are other potential buyers, many of whom are frequently overlooked, who may be the optimal fit for a given business. It is possible that the best buyer for a company could be one of its employees. However, this option comes with risks as well. Key employees and management may leave if the deal falls through, as they now know that the company is for sale.
Finding overlooked buyers is what business brokers do best. Matching the right buyer with the right business is both a science and an art. Teaming with the right business broker or M&A advisor can open up a range of new avenues and help a seller reach the kind of buyer that is as close as possible to the perfect fit.
The post Unraveling the Seller’s Predicament appeared first on Deal Studio – Automate, accelerate and elevate your deal making.