Buzz Harris: Sometimes, you have to kiss a lot of frogs to find a prince (Voices)
Special to the NNBW
With the most recent disruption in our lives there, are a number of buyers who are looking for good companies to buy in Northern Nevada.
Surveys have shown that less than 8% of those who have intensions of buying a business ever do.
Why is it, then, that some individuals actually purchase a business, yet the vast majority does not?
There are many reasons for this. A buyer may have unrealistic expectations regarding the price of a business.
I can’t believe the times I’ve seen a potential buyer’s chin hit the floor when they realized the financial investment it takes to purchase a good company with positive cash flow.
Related to this is the misconception some buyers have about being able to buy a business while they continue to be employed at their current place of business.
This is like trying to raise a teenager while in a coma.
Even though buyers may often have an urgent “need” to buy a business, they lack the courage to take the “leap of faith” necessary to go through with the sale.
Like a lot of things in life, it’s easier to talk about doing something than actually doing it.
Also, a recent financial setback can impact a potential buyers ability to consummate the deal.
A family medical crisis, a significant others loss of a job, a bad quarter in the stock market, etc., can impair the buyer’s ability to raise the necessary capital.
Sometimes, it’s not even the buyer’s fault, as outside influences can also hamper the successful transfer of business.
For example, a buyer may receive well-intentioned yet overly aggressive advice from other outside advisers.
Although anecdotal, it is difficult to find a buyer’s accountant who felt that their client didn’t pay to much for a business.
Conversely, seldom have we come across a seller’s accountant who felt their client sold their business for enough money.
Lawyers can also influence a deal. While working to protect their client’s interest, at times lawyers need to be reminded to work toward the goal of putting the deal together, not build roadblocks to derail. After all, their client’s fundamental goal is to sell their business.
Earlier this year, two hours prior to a scheduled closing, a local lawyer faxed over 18 language changes to their client’s closing documents, which almost broke the chemistry and the deal between the buyer and the seller.
One of the main reasons why sellers should consider turning to a competent business broker for assistance when deciding to sell their business is because of the minimal amount of buyers who actually become owners.
A professional facilitator means the seller can continue to maintain their focus on making the business as profitable and attractive as possible while the broker separates the real buyers from the wannabes.
For example, there is a thriving family owned business in Reno where the owner has tried selling the business himself for the past 18 months.
There have been a number of well-intentioned inquiries, but none of those “buyers” would ever be converted to becoming an “owner.”
This is the seller’s main motivation for recently deciding to have our office market the business for him.
Likewise, buyers should turn to a business broker for assistance when actually deciding to purchase a business.
They can show the buyer a variety of businesses that are legitimately interested in selling and helping them through the purchase process.
With plenty of businesses to choose from in today’s market, it is more important than ever for buyers to make sure that their efforts are concentrated on choosing the right business for themselves.
Buzz Harris, a Licensed Business Broker with The Liberty Group of Nevada, writes a recurring Voices column for the Northern Nevada Business Weekly. Contact him at 775-825-3948 or via email at BHarris@TheLibertyGroupofNevada.com.
From a national standpoint, research shows the embrace of digital commerce is a whole decade ahead of schedule thanks to the pandemic. We spoke with the Retail Association of Nevada, Downtown Reno Partnership and the Reno+Sparks Chamber of Commerce to give local context to the growth of online retail.