Learning By Example: A Seller’s Nightmare
Wrestling with the decision to sell a company is not easy for any business owner. It turns out the entire selling process can be just as difficult.
For the past year, I’ve been following Inc. magazine columnist Norm Brodsky’s nine-part column chronicling the sale of his document storage business. It was a roller coaster affair full of ups and downs. Brodsky thought he had found the perfect buyer and an offer matching his exact asking price and terms, but he quickly learned differently.
The buyer had his own ideas and negotiations continued well beyond set deadlines. Days before the closing it was revealed that Brodsky was negotiating with the wrong guy. It turns out that a minority board member actually held veto power over the board, and therefore, had final say on the terms of the deal. So, Brodsky would either have to cave in to less than desirable terms or walk away. In the end, he chose the latter and didn’t sell. After seven months and spending nearly half a million dollars in legal and accounting expenses, Brodsky ended up with only a learning experience and a saga to tell.
To help building service contractors through the ordeal of selling their business (or at least a division of it), writer Becky Mollenkamp reports on the step-by-step process for smoother selling. In our September issue we’ll examine the other side of acquisitions: buying a company.
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