As a business owner, you are no stranger to taking risks. Stepping out of your comfort zone and facing challenges are necessary to learn and grow in business. Business owners must also assess risks and determine which ones are worth taking. The same is true for selling your business.
One risk that may wind up being too risky with no payoff is going the DIY route to sell your business, especially if you don’t have experience with the intricacies of selling a business. Doing it alone means a higher chance of losing money and time and obstructing your retirement plans. Here are five risks associated with selling your HVAC business without a broker:
1. Valuing Your Business Incorrectly
Undervaluing your business is one of the most significant risks of selling independently. With the proper experience, tools, and resources that come with a broker, you can avoid undervaluing or overvaluing your business when listing it for sale. When hiring an HVAC broker, you’re gaining an experienced partner who will calculate an accurate HVAC business valuation to ensure your listing price is competitive, realistic, and reasonable.
If you price your business too low, you will have less money in your pocket. You could lose hundreds of thousands of dollars and not even be aware of it. Buyers will exploit your inexperience and jump at the opportunity to buy an underpriced business.
Pricing your HVAC business too high is also problematic. Fewer eyes will see your listing, and you’ll have difficulty finding interest. This usually leads to spending more money on marketing. With your broker’s expertise, you’ll never have to worry about an inaccurate selling price.
2. Paying the Price for Marketing
When you hire a trusted HVAC broker, the marketing cost is part of your overall fee. HVAC business brokers bring many connections and marketing channels within their network. One of the most significant upsides to hiring a broker is accessing their network of potential buyers.
Setting up the same connections and marketing channels without a professional would take much work and effort. Even if you spend buckets of money on marketing, there’s still no guarantee that your business will sell. The marketing side of a business sale requires a unique strategy that brokers are equipped to implement.
3. Wasting Time
As a business owner embarking on the complicated journey to sell your business, your time is valuable. An interested buyer does not equal a qualified buyer. It’s time-consuming to meet with and sift through hundreds of interested buyers who are not qualified to buy your business. This will feel like a draining waste of time while you’re still running a business, getting your business ready for selling, and your laundry list of other obligations.
An HVAC broker will enable you to focus on other obligations while they handle the task of finding eligible and worthy buyers for your particular business. Your broker can do the energy-draining sifting, so your options are solely for qualified potential buyers with healthy offers.
4. Struggling with Negotiations
Negotiations can be extremely challenging without experience. Even those who have been in these discussions before, find them difficult. As the owner, you are likely emotionally invested in your business. Many don’t realize the emotional toll of selling a company until the negotiations phase.
If you enter negotiations alone, separating your emotional and logical thinking can be difficult. Emotions can even stop you from going through with the sale. Furthermore, emotions could cloud your judgment, and inexperience can lead to compromise on a price below what you deserve.
Negotiations are one of the most challenging stages of a business sale and doing it on your own can be detrimental to the success of your sale. An HVAC broker has the experience, business sense, and legal knowledge to negotiate on your behalf, reach the highest price possible, and reach an agreement everyone is happy with.
5. Maintaining Confidentiality
It is tough to keep the sale of your business confidential if you’re doing everything yourself. If you’re the face of your company, meeting interested buyers, making phone calls, and giving tours, people will find out pretty quickly what your business’s name is.
Confidentiality is such an important aspect to uphold during the selling process, and with an HVAC broker, an interested buyer would have already signed a confidentiality agreement. This keeps your business and all invested parties safe during the sale process.
Confidentiality is crucial during the sale process because you don’t want your employees and investors to panic and make rash decisions. Those rash decisions could significantly devalue your company and affect your plan. A lack of confidentiality is a considerable risk when selling your HVAC business independently.
It’s your job to decide if you want to face the risks of selling your company by yourself or team up with a reputable and experienced HVAC business broker who will value your business correctly, take the lead on marketing, free up your time, negotiate like a champ, and keep confidentiality a top priority. If you need a business valuation and consultation, we’d love to be a part of your selling journey.
