Photo by Jessica Tan on Unsplash
While we offer buyer and seller services, we are also proud to be a knowledge hub for owners who may decide to go their own way and represent themselves in a FSBO (for sale by owner) situation. Unfortunately, we often hear of unhappy stories from these situations.
No NDA
Not that long ago someone came to us after trying to sell her business. She had the potential buyer sign an NDA and he took her tax returns and financials and other information and used it to poach her biggest customer. Turns out he was in the same industry.
No Advice on Valuation
Without a seasoned professional validating (or pushing back on) your valuation, however you have determined it, you may go to market with the wrong price, and that can lead to the process taking far longer than it should have. In rarer cases, it can lead to sellers leaving a lot of money on the table because they made concessions we would never have advised them to make.
This happened recently with someone who after struggling with the FSBO process, decided to just sell to an employee. When we told him his price was way off, he tried to back out of the deal he had already made.
No Checklist for Preparation
Yes, FSBO sellers think that ChatGPT knows a lot (and perhaps it does) but without an advisor to make sure they are prepped for sale, how do they know they’ve covered all their bases? Our checklists are based on thousands of transactions over decades, and as much as it knows, ChatGPT has never sold a business…yet, anyway.
No Time Management
There are many times in life it may make sense to do something yourself. For example, you want to add a deck to your backyard, happen to love woodworking, and don’t have any specific timeline you need to have it done by. You can simply work on the project when you can. This isn’t how a business sale works.
Not only are you on the clock as a seller, preparing for a sale, providing important due diligence information etc., but now you have created a job for yourself as an intermediary, which has its own tasks in addition to those a seller would have, i.e. managing and sorting through offers and LOIs. In addition to those roles, you still need to run your business.
We often find that FSBO owners put themselves through a prolonged period of stress, having to run a business, prep it for sale, and present it to the potential buyers.
Were you considering a FSBO, or have tried it already and haven’t had success? We’d love to chat with you to show you how we can help you get more money using less of your time, with a lot less stress. Reach out today.