A Hell of a Way to Sell a Business

Since starting Worldwide Business Brokers back in 2001, we’ve seen some crazy stuff but never have we seen anyone try to sell a business the way I recount in this story.

From “creative” accounting and inventory “deflation” to missing bank records and even imaginary owners, it never ceases to amaze me how some business owners can simultaneously exist in both the real world and an imaginary one.

But about a month ago, I was really stunned when a novel approach to selling a business came to my attention.

A couple of guys who own a 30-year-old restaurant and bar in the Midwest of the United States announced that they were interested in selling…

…via a press release to the Local Font of Knowledge, a daily broadsheet with a circulation of roughly 27,000.

That’s right; a press release. What could possibly go wrong?

Well, a couple of things, actually; both long term and short – and the short term ones erupted immediately.

Let’s look at the long term problems first.

Long Term Issues

One of the owners was a founder of the business, in it from the beginning; meaning he has worked in this restaurant/bar for the past 30 years. The other owner started as a manager 20 years ago before buying in. While both appear to have extensive experience selling beer, neither has any experience selling businesses. (And to paraphrase the brilliant and highly-esteemed philosopher, Chris Rock, “Nobody has to sell you a beer. Beer sells itself. I’ve never heard a bartender say, “How’m I gonna get rid of all this beer?”)

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Think about this: if a press release – or classified ad – is the extent of the marketing being done, how many of the 27,000 people that the paper supposedly reaches do you think will ever see the announcement or ad? And how many of them are buyers??

The announcement’s not on the front page – where people buying their morning coffee and a doughnut at the local 7-11 might see it when passing the newspaper rack as they make their way to the cashier – and then only if it has a catchy headline and a placement above the fold! (FAT CHANCE!)

It’s not on the first page of the sports section – where the mechanics at the local tire company automatically go to see if their team has the proverbial snowball’s chance in hell of making the playoffs!

No. At best, it’s buried at the bottom of the “business” section, a section that is now so small in most local and regional papers that it has been reduced to two pages, half of which is comprised of legal ads announcing foreclosures, yard sales dates and pleas for the return of missing cats named Ploppy.

How many of the 27,000 people the paper supposedly reaches will actually see the announcement? And how many of them do you think will actually be interested buying a restaurant – or ANY business, for that matter? And of that tiny minority, how many do you think will have the dough required to do the deal and, most importantly, the support of their spouse to pull the proverbial trigger – an event that is sure to blow a whopping hole in the family retirement fund?

Why is a Professional Business Broker Needed?

Selling a business requires much more than, in the immortal words of our heroes, “…getting the word out”.

There’s marketing to be done. There’s a valuation to be established. There’s a marking package to be developed. There’s a value that the current owners have in mind that must be addressed – and somehow reconciled with the actual market value of the business because the two values are almost always so unlike one another as to reside in different galaxies.