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Wednesday, August 02, 2006

More tales from Biz Broker Wife...

One of my wife's standing peeves is sellers who can't realize that they're selling a business, not hitting up their buyer as an ATM to rebate all the money they spent on the business. A typical would-be seller:

"I paid $70K for this biz a year ago, which made $40K/year at the time. I spent $30K upgrading everything and putting in new floors. Last year, it made $20K as the biz had a falling off of business due to the ownership transition. Now I want to sell for $150K, which includes my $70K original price, my $30K of upgrades, your commission, something extra for my troubles, and a bit of headroom for negotiation."

Biz Broker Wife informs the guy that a buyer is only getting 13% ROI at that price and would probably just keep his money in the bank, and asks him: would he buy the biz at that price? He replies that selling the biz is her job...

Comments:
Selling illiquid assets for third parties has got to be one of the hardest -- and most underappreciated -- jobs out there.
 
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