These days I spend a lot of time helping business owners buy and sell businesses. Buyers and sellers are almost always unprepared for the process. Salespeople are surprised when buyers “call their baby (the company) ugly.” They also greatly overestimate the value of their company. Buyers are surprised that the financial reports are not always accurate or that the seller has “skeletons in the closet” when doing due diligence.
On the Small Business Radio Show this week, I spoke with Guardian Due Diligence's Elliott Holland, a Harvard Business School graduate and small business acquisition expert. It helps entrepreneurs do two very important things: (1) make great small business acquisitions and (2) close bad deals quickly, saving time and money. Elliott offers an audit-like product called Quality of Earnings (QoE) to verify the numbers on the messy and unaudited financials of a typical small business. (Buyers typically do this when purchasing a business.) He also advises clients throughout the business buying process from start to finish.
Here's what we talked about in our interview:
- Why should every owner run their business as if they are going to sell it one day (because they probably will and it takes time to prepare for that).
- What unique value do M&A lawyers, accountants and brokers bring to the process? What price should I expect?
- What are the biggest mistakes people make when buying (and selling) companies? How can you avoid them?
- How should owners find buyers for their business? Should they hire a business broker or a mergers and acquisitions specialist? What are their typical fees?
- How can you make the business acquisition process easier for buyers and sellers?
If you're thinking about buying or selling a business, listen to the entire interview with Elliott.
Image: Elliott Holland