We’ve always cautioned sellers to be on guard against the business broker, advisor, or marketing expert who is working to take advantage of them. Selling a business is an emotional experience and there are those in my profession who will work to capitalize on the inexperience and greed of a business owner. (At least that is our opinion)
Our BizNumber Evaluation program was inspired by the out of state ‘expert’ who was coming to town and selling business owners what we felt were high business valuations for excessive prices. I recently visited with an owner who signed one of these agreements and would like to share a few excerpts from the agreement. I have to be very vague and keep this anonymous but it is a story that should be shared.
We were appalled by:
- The three year term of the listing agreement is bad enough by itself, but “if the business is not sold within thirty-six months…… the balance (of the advertising fee) will be due to ______ if the owner sells the business within six months following the thirty-six months.”
- The SUCCESS GUARANTEE includes the phrase “if you do not sell your business this would constitute that you are not successful with your personal advertising results…..”
Many business brokers like to capitalize on your emotions. Many are trained to be that way. Have you ever experienced the “he who speaks first loses” negotiation?
Selling your business is one of the biggest, most emotional decisions. It should not be taken lightly or done in haste. Do your homework, take your time, and check references. You owe it to yourself, your family and your business to check out the person or firm who is going to be helping you sell your business.