We caught up with Brett, a San Francisco business owner who recently sold his college counseling business with help from BizBuySell. It took Brett approximately five months in total to sell his business, from starting the listing process on BizBuySell until signing the sale agreement, and transitioning the business to the owner. Below is our interview:
Q: What type of business did you own?
I had started a college counseling business while doing my MBA; The business was focused on helping high school students leverage their academic and athletic skill-sets to get into their best fit college.
Q: How did you come to the decision to sell your business?
College counseling can be a very rewarding line of business. After three years, my start-up business was profitable, growing, and I remained passionate about the work and the impact I was making in the community. I loved how I was spending my time and energy.
But there was one glaring problem: I couldn’t scale the business.
With everything that entrepreneurs pour into building a business, it’s difficult to remain objective. I was no different – “If this happens, or that happens, I’ll hit my sales target.” I wanted to succeed, and I was in control of my own destiny as CEO, so it was easy to convince myself to keep going.
However, it became clear that my goals for the business weren’t matching performance.
Q: How was the process of creating your business-for-sale listing on BizBuySell?
When I decided to sell the business, I posted it with mixed emotions. Entrepreneurs learn how to embrace ambiguity, and live with uncertainty, but given the emotions involved, this was a tough decision. Nobody is there to tell you that it’s the right decision, and nobody is there to tell you the price at which to list the business or how to manage the ownership transition.
Fortunately BizBuySell made the entire process easier than I had expected.
Q: What other resources helped you prepare your listing?
There were a lot of tactical questions I had as a business owner – “What does a good listing look like? What are typical owner financing arrangements?” I spent approximately 3 hours reading other people’s ads, I read the BizBuySell Guide to Selling Your Small Business, I studied the legal documents referenced in the guide, and then I wrote my own listing, and posted it to the website, expecting a flood of inquiries to follow.
Q: How soon did you start to hear from buyers?
At first, nobody expressed interest, not a single person in 5 days! I ended up making changes to the ad a few days later by removing my company name, adding more financial information, and more market/business descriptions. Wow – my first try at the ad was terrible!
Another lesson in reality – Valuing the business at 10 times EBITDA won’t attract many buyers, no matter how great you think the business is. After adjusting my valuation back into a realistic range, the interested parties started to pour in. I got my first lead on Day 14. And I received another 3 leads over the following few weeks. All were credible.
My mindset starts shifting from “is anyone even interested” to “how can I manage this pipeline of inquiries”? Luckily BizBuySell was there to help out. I referenced the Guide to Selling Your Small Business multiple times to learn more about the selling process, and even called and spoke with a BizBuySell representative to get some further advice. Armed with this new knowledge, I found it surprisingly easy to manage the conversations, the sales process and the ownership transition
Q: Did you do any additional promotion of your ad?
Since I didn’t have any employees, I wasn’t worried about confidentiality, so I emailed the BizBuySell listing to my network of friends and interested parties rather than sending an attachment. I wanted to get the word out that I’m trying to sell the business, and the listing was much easier to use.
Q: So it sounds like you were successful in selling your business?
I ended up selling my business to a company on the East Coast, who had the resources required to grow my business, and the experienced leadership team to execute the growth. The ownership transition was seamless, and I’m enjoying the next phase of my professional career!