Minding My Business by Adeena Mignogna

Author:Adeena Mignogna
Language: eng
Format: epub
Publisher: Skyhorse

Chapter 6

Exit Strategy: Getting the Business Ready to Be Sold

I just got off the phone with my business broker; I’ve agreed to lower the asking price for my business. It’s been listed on the market for a little less than a year. I had one major bite, but it didn’t pan out.

It’s early 2006 and I’ve been getting terribly anxious. Living the double life for the past year and a half has been hard. I need the income—I have a mortgage to pay —but the catch is that I’m not devoting the time and attention necessary to the business, which means the business suffers, and that makes it harder to sell.

FINDING A BROKER

It was when I went back to work as an engineer that I first had the thought about selling my business. That was before Christmastime 2004, and I believed The Pot & Bead would be sold by the following summer.

After the New Year, I started looking for a business broker to work with. I didn’t have to look too hard. Reputable and non-reputable brokers alike will frequently canvas businesses and give out their card—simply to let you know they’re there if you’re thinking about buying or selling. It’s similar to how real estate agents send cards to your house. For someone who was as busy as I was, I did somewhat appreciate this approach (assuming they’re not pushy and expect a callback), so I called one of the guys who had recently dropped in.

Much like when you sell your house, you sign an agreement with a broker when you list your business for sale. This particular broker presented me with an agreement and I forwarded it to my lawyer for review. The lawyer gave a big thumbs down on the agreement—there was a clause saying that I would owe the broker a fee even if the business didn’t sell!

Even though some brokers try to write in a clause like this, it’s not the norm. If you don’t think you can read through a contract on your own and pick up on these details, then definitely have a lawyer review anything before you sign. Whether you choose to use a lawyer or not, read the books listed in Appendix D on selling your business before you contact a broker.

I told the broker I wouldn’t sign it—that clause had to be removed. The broker refused and then pulled a really sleazy ploy: he called me up saying that he had a potential buyer and that I needed to sign right away. My lawyer suggested that if that was true, he should be willing to let me sign an agreement only for this potential buyer; with no fee if it didn’t work out. The broker refused, which told me that he really didn’t have a serious potential buyer.

This all took place over more than a month, after which I was a little hesitant and not feeling rushed to find the next broker. Enter broker Number Two in the spring of 2005.

We

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