Sad news for the owner, employees and the community
After 82 years, a small but unique Vancouver business icon willcease operation. The owner, the third-generation business operator of the Umbrella Shop is closing the door as opposed to selling. This situation is not atypical for business owners. In my opinion it is sad for the owner, the employees and the community.
Glen Korstrom, reporter for Business in Vancouver, reached out to me to comment on this news for his story. I quoted the Pepperdine University’s annual survey of business brokers that find approximately 75% of small businesses valued at $5 million or less fail to sell after a first attempt. Selling a business is complex and as I told Glen, “you don’t simply find a broker, determine a price and put a for-sale sign on the lawn.”
There are many reasons ‘business builders are not the best business sellers’. Here are three of the most common:
1. The owner is just not emotionally prepared to leave the business. With no preparation for what they might do afterwards, or active delegation and succession planning they hit a life event that prompts them to leave with no time or preparation for selling.
2. The owner with blood, sweat, passion and tears in the business has an unrealistic selling price in mind.
3. Inflexibility in the terms of the deal. Buyers may need or want some creativity in the terms of the deal. Sellers may need or want easy terms and quick completion.
Sellers can benefit from advice early on, well before they need to sell. Maximizing the value of a business can be achieved with the experience of advisors who specialize in business exit planning along with tax, legal and accounting expertise. They help owners get organized and business value optimized so the business selling price can be maximized.