Listing vs Selling a Business in Tucson Arizona
Posted by Jeffrey Abbott
If you want to sell a business in Tucson or Southern Arizona, or make a Tucson business investment, choose your business broker carefully.
Most business owners seeking to sell their business in Tucson or Southern Arizona have a pretty good idea of what they would like to get for their business. And there are many business brokers who will simply ask them what price they want for their business, and then tell them what they want to hear. “Sure, I can sell a business in Tucson like yours for that price,” they’ll say. They will tell a business owner that they can get whatever he or she wants for the business in order to get the listing. They base this decision not on any analysis of comparable businesses for sale in Tucson or Southern Arizona in the past or present, nor based on the soundness of the business’ financials, rather on their desire to get the listing. Such brokers are in the “listing business”, and are not being 100% honest with business owners seeking to sell their business in Tucson or Southern Arizona during this process.
When you sell a business in Tucson or Southern Arizona, what you end up getting for your business is not what you want for it, but what a buyer, someone wanting to buy a business in Tucson or make a Tucson business investment, will be willing to pay for it. Any rational buyer (and nearly all buyers of small businesses are highly rational about how to invest their hard won dollars) will perform due diligence on your business and determine what they are willing to pay for it based on the reality of its historical financial performance and a realistic assessment of future cash flows. The fact is that this has very little to do with what you may want for your business, or think it is worth. If you are trying to sell a business in Tucson or Southern Arizona, keep in mind that the asking price is what a seller wants, and the sales prices is what a seller gets based on market realities.
If you work with a business broker who is in the “listings” business, and who goes along with listing the business at the price you might want, but a price that is not supported by the financial performance of the business and prevailing market realities, you will get a wake up call not long after the business has been listed. Your broker will tell you, usually within 30-60 days, that your business hasn’t received many inquiries from investors seeking to buy a business in Tucson or Southern Arizona, and that they would like to lower the asking price. They will lower the price repeatedly over time until it reaches the range of its realistic market value. In other words, the price it should have been listed at to begin with. At this point, buyer inquiries are more likely to occur and to be serious.
If this sounds to you exactly like what happens when you are selling a house, you’re right, because it is. Most business brokers operate their businesses based on the real estate model, and have no further training or certification to enable them to properly understand the differences between valuing and selling a business and a home. But the two could not be more different.
If you want or need to sell your business, wouldn’t you rather work with a broker who counsels you to set a realistic market price based on fact-based analysis, and who will sell your business as soon as possible because it is priced right?
Allen & Young’s brokers have achieved many additional accreditations and specializations within the field of business brokerage, and we do not run our business based on the real estate model. Our customers are only satisfied when we put money in their pockets, as soon as possible. We will not list a business at all unless the seller agrees to set a realistic asking price.
If you are serious about selling your business, and want to deal in a straightforward process based on experience, integrity, facts and analysis, please contact us.
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