Story Two – The shortest meeting I have ever had
When I am about to deliver a written assessment of the market value, I approach those meetings somewhat hesitantly ….
Because of this particular incident.
On this day I entered the owners office, I straightaway handed over the written valuation document. The business owner immediately opened it, read the summary and promptly dropped the document into the trash bin beside his desk – before I had even taken my seat.
I was dismissed with a wave of the hand and the statement – “That’s useless to me, my Accountant
told me my business was worth three times that.” I left, and I admit I was cheesed off.
I did later receive a phone call from that business owner, saying he had read my report fully. I did
eventually list that business for sale in the upper range of the assessed value – and that same owner
did receive a written offer for exactly that upper value. Much to mine and the prospect purchaser’s
astonishment, the external accountant persuaded the business owner to reject the offer and the deal
never went through. Some four years later, that owner was still putting in the hours, still being guided
by a well-meaning but ignorant professional and I have heard, no happier and no wealthier.
The cold hard facts are that 50% of business sellers receive 50% of their expected value. Not because
they get cheated, but because they and their advisors have no idea of the real market or its
assessment of value. The market data wins every time – buyers don’t pay a premium.
