For me, the most difficult part of evaluating a business is meeting with an owner who has let his business “slide” for too long. I recently had such a meeting, initiated by a referral’s call stating the owner is “thinking of selling”.
During this meeting, I noticed the owner’s vivid memory of his business in its heyday, as if he were somehow living in the past. Only five or six years ago his gross sales were through-the-roof.
Unfortunately…circumstances in recent years had dramatically changed the pace of his business. He listed reasons and excuses for the downturn, but he had no plans and had taken no action to mitigate the decline. Now he said he was too old, had no energy, and it was too late for him to make changes, therefore he was ready to sell.
Looking through his financials, the painful truth emerged. His business had no value above the liquidation price of the assets; he had lost any business equity he once had. I watched and consoled him as he struggled through the 5 stages of grief: Denial, Anger, Bargaining, Depression, and finally, Acceptance.
My heart breaks for owners in his situation. Looking around his office at pictures of family, employees, and industry awards, his pride in his company was clear. I sure wish I could deliver better news. All his possible interventions, anything he could have done to change this result, are long in the past.
Alliant Capital Advisors offers business owners free, confidential analysis. Even if you’re not ready to sell, at least you’ll know exactly where you are.
Regional Vice President – North Alabama