Shortage Of Buyers For Retiring Business Owners (Really!)

A report in the Daily Telegraph on 13 December stated that “Family business owners are struggling to sell up to staff because of bank lending policies and the weakness of the economy” Which seems to be based upon a statement made by the president of the Electrical Contractors’ Association.

The president a lady called Diane Johnson stated that some of her members are “closing them (their businesses) down because they can’t find people to buy them, because the people working for them can no longer raise the finance.”

Well certainly if you are just looking for your employees to buy your business you may be disappointed.

It is certainly our experience that there is not a shortage of buyers in the market as the President declares indeed when we obtain an instruction we seem to have no trouble in obtaining plenty of enquiries.

In our opinion this article shows three failures in the selling process with these businesses leading to the business owners failure to sell:

1. The business owners have clearly failed to plan their sale, their strategy seemingly is to look for a buyer within their business and employee without access to any capital. The lack of planning will also affect the selling price of the business.

2. They seem to have not instructed a business transfer agent, rather they would prefer to blame the banks who refused it seems refused their employee funds to buy their business.

3. They perhaps want too much for their business. Business owners sometimes have strange ideas about how much their business is worth. Rather than closing down the business and get nothing for the goodwill, perhaps their best course of action now would be to simply reduce the price.

We have plenty of buyers enquiring about businesses, certainly we do not recognise a lack of buyers, confidence in the economy and access to funding to be an issue, rather that the fault lies with the business owner.

This entry was posted on 15/12/2010 at 10:44 am and is filed under Selling Your Business, Buyers, The Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.