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Home Magazine Web Extra: February 2010 "Buying and Selling a Business: Part II"

Web Extra: February 2010 "Buying and Selling a Business: Part II"

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"EGO-FRIENDLY"

Jim Huston | March 11, 2010

Keep in mind that many contractors doing up to $400,000 in annual sales are often prime candidates for purchasing. It’s not uncommon for an excellent technician to start a business and get sales up to the $300,000 to 400,000 range by providing great service and technical expertise.

However, the strength of these types of contractors lies in providing great technical service, not in building a company with all sorts of conflicting personalities and the related bureaucracy. Their reputation for great work and service gets them plenty of work.

Unfortunately, they tend to focus on doing the work and not building the company. They’d much rather play the game than “sit on the bench” and coach it. These individuals are players, not managers. As a result, they create a monster for themselves. They don’t develop the team to whom they can delegate administrative responsibilities, so it all falls back on them.

These individuals, their companies and staffs are excellent candidates for acquiring. However, you have to understand how ego plays into this situation. It’s an admission of failure for many men to consider selling their company. You have to pay attention to the psychology of this situation and explain why selling a business is not defeat. Rather, it’s a very smart business decision, if done for the right reasons and with the right people.

You should emphasize the following to the seller:

  • You want to become part of an exciting team, that’s growing and going places.
  • This will be good for you personally, as you can focus on what you do best.
  • This will be good for your family, as it will give you more free time to be with them.
  • This will relieve you of the bureaucracy.
  • This will eliminate a lot of your headaches.
  • You’ll make a good salary (and bonus, if applicable).
  • This will reward you and your family for what you’ve built over the years.
  • This will allow you to make a mid-life adjustment of sorts.


To view the full article "Buying and Selling a Business: Part II" from the February issue of L&L, click here.
 

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