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"I not only use all the brains that I have, but all that I can borrow" - Woodrow Wilson
Business Owners who have approached me about selling their business sometimes come to the conclusion reluctantly. They really don't want to sell, often because they honestly don’t know what they will do with their lives once they have sold their business.
This is true far more with men than with women business owners, by the way. Men business owners tend to identify themselves far more with the business than their women counterparts. Men business owners have a harder time adjusting to a life without "the biz."
The selling process also requires the client to undergo a rigorous analysis of their own business to determine the viability of the business, its strengths and weaknesses, and its current problems and long-term opportunities. In effect, we perform due diligence on the business before it goes to market.
This can be gut wrenching for a Seller. We are looking at financials, digging into loans that may not have been well thought out. Contract with Customers which turn out to be not as financially rewarding as one might expect.
An example would be a client of mine who was doing some $50 million a year. They had one customer who represented $20 million of that. Obviously, this was their one big customer, the one they negotiated a big 3 year contract because they didn't want that customer to get away.
After some serious analysis I came to the conclusion that one $20 million contract was losing about $2 million a year. Seller did not believe it. It was too lucrative and too big to be losing that kind of money. But I walked the Seller through the steps to show that in fact it WAS a money loser and was actually dragging the company down.
It took many months of hand wringing but we came to the conclusion they needed to "lose" this one customer or perhaps re-negotiate the remaining of the contract. In the end, the Seller decided to save face. He moved this one contract to another shell company whose sole business was to honor this contract and lose a cool bundle of cash every year.
The main company then became a $30 million enterprise, and much more profitable. The sheer dynamics of moving this one contract over to another corporation made the main enterprise worth some $6 - $8 million more.
Seller never did sell the business. He decided to keep it, and "die with his boots on." But through the due diligence of sales preparation, we righted the ship a bit, and got his business sailing in the right direction.