Ashley (not his real name) called recently and told me he was ready to sell his business. “Actually, I’ve been ready to sell for three years now,” he said, “but the jackleg broker I retained in 2018 didn’t know squat about how to sell a business, so I’m still at ground zero.”
Ashley told me the backstory when we met a few days later at a downtown coffee shop. He said he decided to sell his business in early 2018. While searching for a broker to help him, he was introduced to a guy who seemed to know what he was talking about. Even better, Ashley said, the broker told him had recently sold his own business so he “knew how the process worked” (air quotes supplied by Ashley, with an eye roll).
“As it turns out,” Ashley said, “this guy knew nothing about preparing marketing documents, much less how to identify legitimate buyers, so nothing happened. Then Covid hit, and everything went into a standstill. So here I am, starting over,” Ashley said, “can you work a miracle?”
Unfortunately, I see this situation frequently. A business owner falls under the spell of a guy who says, because he has sold his own company, he knows how to sell someone else’s business. That’s sort of like saying because you’ve had knee surgery you can now do knee surgery on someone else.
Anyone can call him/herself a business broker in the state of Tennessee. There is more regulation for barbers and auctioneers than for business brokers (why is a matter I’ll write about someday). In an unregulated environment like this, it’s not hard to find yourself talking to what Ashley would call a jackleg broker. Even if the man/woman is honest and well-meaning, just having sold their own business does not qualify them to sell yours. Decide whom you will retain with careful research. There are no miracle workers out there to clean up the messes.
JIM CUMBEE is President of Tennessee Valley Group, Inc. a retainer-based business brokerage and transition mediation firm in Franklin, TN. Cumbee is an attorney and has an MBA from Harvard Business School. Jim is the author of Home Run, A Pro’s Guide to Selling a Business. https://www.amazon.com/Home-Pros-Guide-Selling-Business/dp/1599329239 . He has a wide range of corporate and entrepreneurial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee. The principles above are true, but the names and fact patterns are changed to preserve the parties’ identities.
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