Ready to sell your business? Take a moment and learn from the mistakes of three sellers. These individuals couldn’t let go of their preconceived ideas and ended up walking away from bona fide offers from qualified buyers.

Let’s meet the three sellers who threw it all away. After that, we’ll talk about a seller who succeeded.

Seller #1 was unwilling to negotiate
The client banged his fist on the table and called the offer insulting. His face was beet red, and he was in a rage. He didn’t understand that his asking price was merely the opening gambit. Had he kept his cool, he might have walked away with favorable terms or even a decent counteroffer. Instead, he walked away with nothing but negative emotions.

His ego prevented him from reviewing the offer, evaluating synergies that might compensate for price, and crafting a counteroffer with creative terms.

I see this situation happen again and again. The seller does not have a realistic idea of what a buyer is willing to pay and where the buyer may logically justify a discount claim. Remember, the seller’s asking price is designed to attract a buyer and begin the negotiations. Rarely is the asking price accepted without question.

You see, sophisticated buyers follow a process. They do deep research, seek targets with specific attributes and financial ratios, and reject premium pricing based on features they consider irrelevant. Each prospective buyer will enter the process with their own conditions, often decided by someone else in their organization.

This deal went off the rails because the seller was fixated on “winning.” Sellers who, instead, can lean into a win-win negotiation that leaves something on the table are better equipped to complete the sale.  In addition, buyer-seller chemistry, transparency and an atmosphere of trust are vital elements between buyer and seller. Setting the stage in this way can ease stresses and emotions. In this case, the prospective buyer exited graciously with a professional thank you, which so inflamed the seller that he raised his price!

This business remains on the market – shop worn.
Let’s look at the second seller who couldn’t let go. 

Seller #2 was fixated on the numbers in an outdated valuation
The seller went through our no-fee VBS valuation process and was surprised because he received a lower valuation than expected. His preconceived number was based on a report created for internal purposes, unrelated to a sale.

My team reviewed his situation and concluded that our proprietary VBS valuation – based on thousands of recent, completed transactions in our industry – was in the correct range. In fact, it was in the ballpark of queries I had received for businesses similar to his. Yet the seller chose to be insulted by data that had informed the report rather than keeping his sights on the bigger picture – to build values, position and sell his business.

This leads us to our third seller who could not let go.

Seller #3 let go because the process got “too hard”
The seller was a do-it-yourself-er. He had underestimated the time, energy and knowledge required. He was tired of vetting queries, qualifying offers, reading contracts, and keeping confidences required by a regulated guidelines process.

Meanwhile, the seller was struggling to run his business – because he was still working in his business rather than on his business. When he was vexed by a mandated request in a strategic buyer’s due diligence process, it was the final straw. Frustrated and exhausted, he went dark.

A few months later, after educating himself about the offer, he went back – hoping for another chance to get back in the game. The wise buyer said, “Thanks, but no thanks.”  The seller decided not to change personally and became stuck in the world of lost opportunities.

What happens when sellers let go of their preconceptions?
Let’s talk about a fourth seller who did just that. This seller brought me in as a trusted advisor and coach so he could educate himself on the selling process and hold himself accountable to the tasks required.

With commitment, courage and hard work, he recently celebrated a successful sale to a buyer who is an excellent fit. He persevered in spite of world events and personal challenges. With a 24-month plan in hand, he followed my systematic guidance and coaching to achieve his personal and professional goals with the sale of his business. He started with the right information and set aside time to work the plan. He did not let long periods of inactivity occur but instead made progress weekly and sometimes daily. He used data and market research to guide his decisions, while prioritizing his own wellness and the future of his employees. The best part? He had fun!

Tips:
1. Choose an industry advisor who has “been there, done that.” Nothng can replace a lifetime of experience buying, building, running and selling businesses.
2. Open yourself to a process of ongoing education, being coachable and personal transformation.
3. Have a positive goal and a future worth moving toward.
4. Set a timeline that is realistic but keeps things moving. Leaving too much time can stagnate the process and sap motivation. Keep the blood pumping!
5. Work on emotional readiness. Address the financial and personal realities of the sale and post-transaction. Consider impacts on family and employees.
6. Base decisions on current and reliable data, especially company financials.
7. Be ready to adjust expectations as the process unfolds.

Buying and selling involves a measure of risk and reward during all phases pre-sale and well after the transaction. The odds for success improve dramatically when you follow a program like our successful seller did. Remember, the odds drop to zero when the deal does not close. As we’ve seen, it’s vital to control your brain and open yourself to new ideas. Let go of unhelpful preconceptions and you will start to see the odds swing in your favor.


For 35 years, Rock LaManna has helped label and graphics company owners make better decisions. If you are ready to sell your business or improve your bottom line, integrity matters! Email Rock@RockLaManna.com for a confidential discussion about services available from the LaManna Alliance.