Last week as a lead in to Valentine’s Day, the enterprise value specialists at Ceibass described what they especially like about lawn and landscape business owners and how they do business.
This week we have been asked by many readers what it is they dislike about these business owners, especially as it relates to the sale of a business.
“We do not want to be overly critical or to be negative about successful lawn and landscape business owners … they rock as leaders of their companies who serve our industry well,” said Tom Fochtman, Ceibass CEO. “But there are striking patterns of behavior exhibited by some owners that just don’t work well in their favor when selling a business.”
Tom and the team at Ceibass went on to describe some of these behaviors. They include:
Not knowing the true value of their company
Unrealistic expectations are difficult to work around. Getting started with the right range of expectation is a must. Stubborn or uninformed sellers not connected to the reality of the marketplace can discourage buyers and kill a deal. Also, by having an idea of what your business is worth you can avoid the situation where a seller goes through the process and realizes that the sale will not net them enough money after taxes to make it worthwhile.
Not having their “ducks in a row”
Having poorly organized books or not having important documents like financial statements, tax returns or a detailed list of business expenses broken out and ready to go can slow a deal down and stall momentum. Being organized and forthcoming can set you apart and give the deal legs. Seller’s become skeptical quickly if they encounter a poor backroom.
Slow response times to buyer requests
Yes, we can all get “too busy” or have “too much on our plate” but not responding to buyer requests in a timely fashion can thwart the buyers intentions to sell. Prepare and get your company buyer ready in advance as best you can. And in those areas where you fall short, chop-chop, get on it and get it done. Dragging your feet can be an indication of not wanting the deal. ‘Deal fatigue’ is probably the #1 reason a transaction does not close.
No surprises! No due diligence shocks to the system! Issues and problems that sellers think might be a problem need to be brought out in the open. Full disclosure means FULL not PARTIAL admission. Anything that comes up and is a surprise frequently will cause a price reduction, more often than not.
Exhibiting the behaviors listed above often result in business owners leaving hundreds of thousands of dollars on the table, if there is a deal at all. Being in a cooperative mood, with great financials and backup information, is very attractive to potential buyers and can help maximize the sale of the business for sellers. Be in your best behaviors.