Does Size Matter? (When selling a Business?)

Well, this question often comes up as there are quite a few one-man business brokerage firms that sell small businesses. These one-man shows are all about trying to list and sell businesses anywhere from very small (100k sell price) businesses up to $5 to $10 million in sale price. This can be a very confusing process.  Sometimes these “one-man” firms have a nice website and come across very competent. So does it really matter if it is a one-man firm or a firm that has 5, 10 or even more professionals?

Candidly, let me explain why a one-man show is not typically the right solution for most businesses. First let me be honest. I sold my business with a small business brokerage firm and what I’ve learned since I’ve got into actually selling businesses is I got Screwed. Sorry to be so crude but bottom line is I literally got half of what I should have received when I sold my business through a one-man business brokerage firm. Why? Well it’s very simple. He had no resources.

Industry statistics show that Business Brokerage offices with only one broker on average sell just a little over one business per year. When a business brokerage firm that has an average of five brokers per office will sell 20 businesses per year! Think about that! That’s four businesses per broker. What is the difference? Well it’s certainly resources. I’m not talking about financial resources as much as I’m talking about people resources. There is something very powerful about having five people sitting around a conference table discovering the best customized strategy to sell your business. Not just selling a generic business but a business sales firm that understands the complexities of your company. Just as every person has a different finger print, also every business is different. Even if a firm has sold 10 businesses in your industry, they have never sold YOUR particular business. Therefore, there are complexities about your business that require a customize sales process. This means it is critical that you have multiple people strategizing and searching to find the right buyer for your business.

I believe that you’re wasting your time, wasting your efforts, wasting everything that you’ve put in your business if you go with a one-man show.  I’m sorry to be so passionate but I did when I sold my business and I got screwed and I would hate for you to as well. In my opinion, there is no doubt that you are going to get a “bad deal” if you go with a one-man business brokerage firm that only has one agent or one broker in the entire office. It is actually doing you the business owner a big disservice. After you’ve put your blood, sweat and tears into this business you run the risk of throwing money in the trash. So my concern can be boiled down to one statement… Don’t put all of your eggs into one basket!