In my experience (and in the experience of some of my clients), there are unfortunately two prices you’ll get to sell your store.
The first price usually comes from what I like to call the “lazy broker”. This is the price that tells everyone “you are for sale” and is typically a higher price that no one will pay. It’s the price all dealers want to hear, but no one wants to dish out. It’s that price that leads you to believe you are getting that coveted 10X multiple but in reality, that “lazy broker” promised you the sky but can only bring you something barely off the ground compared to his/her promise. This price is always the over promise and under deliver scenario and is NEVER a real price.
What really frustrates me is when this now unhappy dealer wants to try a more reputable company to help fix the disaster that the “lazy broker” made, they go to a professional broker with the same number they want because the “lazy broker” has put that in their head. The dealer believes “It’s not the number that’s wrong, it was the brokers inability to sell that was at fault.” It’s now down to the reputable broker to gently let them down with an accurate presentation of real market values and multiples and a price that gives them the best opportunity to sell. I could go on and on regarding the damage the first price can do to your reputation, staff and over all real market value, but I won’t…I will leave that for another post soon.
The second price is the price that you get from a reputable and professional brokerage firm, like DSMA. This is the price that will move your most valued possession, the one thing in your working career that you have poured all your sweat and tears into. It’s the price that will get the store over the curb as quickly as possible, so you see no adverse reactions to your business or with your staff or customers. Sometimes that price isn’t always what the selling dealer wants to hear, but the reality is, it’s the right price to sell.
With over 800 automotive business valuations and 200 successful transactions in the past 6 years, DSMA has the most diverse and accurate data base of market intelligence and the most feet on the ground to get the job done for you… we don’t need to inflate a price just to get a listing.
So, be careful of false prices and don’t let yourself be flattered by a higher listing price. Everyone wants to sell their business for as a much as possible, after all it’s a sign of success to sell it for a lot more than you invested into it. But the market will determine how much your business is worth, not a “lazy broker”.
To discuss this article or any aspect of the buy/sell process, please feel free to reach out to me at any time at firstname.lastname@example.org.