The best business sale transactions are founded on balancing realism and optimism
We often say that what we do for a living is "manage expectations." It's a funny little ice breaker that also puts one of our main USPs front and center for the remainder of the conversation.
Now, obviously, what we do at Robbins Pellegrino: a business brokerage firm is just what our name implies. We broker business sale transactions. We partner with business owners in their pursuit of an exit, we connect them with ideal buyers and ultimately negotiate on their behalf for the very best terms that are a win/win for everyone involved. That's the business we're in, but the root of what we really do on a day-to-day basis is manage expectations.
Selling a business is just as much an emotional event as it is a transaction. As a business owner, there is likely a lot of pride in the machine you've built. In other cases, you're trying to drop the operation like a hot potato and just get out of dodge. There may be familial variables, financial complications, etc. Whatever the situation is, it's often difficult to separate emotion from a business transaction.
So when we walk a business owner through their initial valuation and the price at which we intend to list at, we start by managing expectations. We had a meeting with a prospective client just yesterday where we offered a valuation that was maybe a bit lower than he was hoping for. "But what about this...? Did you consider X in this valuation...? I thought businesses in my industry are going for Y multiple?" he said, concerned that the business he had built over 20 years was going to go in a Fire Sale.
The considerations our prospective client (who actually just engaged with us officially today) cited were not unfounded. In valuing a business, every detail matters and can be considered in such a way as to impact the valuation. But what he soon understood during the ensuing conversation is that what we actually doing is we are managing expectations by providing a conservative look at what's possible. We believe that a business is worth what someone will pay for it, full stop. And to that end, the sky is the limit. But you have to start with a conservative baseline. If we were to blow smoke and tell him a number that made him feel good, where would that leave him? Where would that leave us? If emotions were high during that initial conversation, imagine if his business was on the market for 12 months with no bites because he was overvalued.
The same applies to the negotiation of terms, the due diligence period and ultimately the actual closing of the sale. At Robbins Pellegrino, we aim to under promise and over deliver at every term. While some brokers get clients by overhyping possibilities, the "hope and dream" we are selling is the reality of cashing out on your business and moving on to the next thing. That implies operating within the bounds of reality, not hype. Rest assured, you're going to get the best possible price for your operation if you stick with our process and heed our counsel. We're conscious of every variable and able to wield them accordingly with the appropriate prospective buyer. But we start with a conservative baseline. Our clients are happier for it; and frankly, so are we.
About Robbins Pellegrino: Robbins Pellegrino is a Florida-based business brokerage firm led by Chandler Robbins and Joe Pellegrino, Jr. that is committed to redefining industry standards. We focus on creating meaningful partnerships and ensuring successful business transitions for both buyers and sellers. For more information, visit us at www.robbinspellegrino.com or call (239) 360-6273
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