Selling Your Non-Internet Business
Selling your business is hard work. You’ve sacrificed so much of your life and poured in so much sweat that you don’t want the company going to just anyone. You want to find someone who cares about your business and its culture. Someone who is not going to risk what you’ve built. Someone who will treat your employees right. Someone who will treat your customers right.
Where do you find this person?
Selling your business, especially through a broker, is a frustrating experience. Brokers promise the world and leave it to the buyers to bring you back to reality. Negotiations are long, emotional, and draining which encourages an adversarial relationship. The typical process to sell through a broker is, at least, 6–12 months.
The due dilligence process alone can take 90 or more days days, and usually winds up with the buyer going back and trying to renegoitate a few things after they’ve learned all about your company.
As the seller, you’re now 8 months or so into the process and the prospect of doing this with another buyer weighs on you, so you concede just to get the deal done. Only you’re not happy.
There is another way.
What ever happened to the handshake deal? The one page contract build on mutual trust?
Things used to be easy.
Warren Buffett, perhaps one of the best investors in the history of the world, is famous for his handshake deals and one-page contracts. He attempts to avoid dealing with intermediatires, preferring to deal with the owner. In his mind the type of deal the owner approaches him with says a lot about that person an acts as a strong signal to see if he’s got the right partner.
This is how we’ve modelled our business.
At Farnam Street Holdings, based in Ottawa, Canada, we’re old school. We don’t think about decisions in the context of right now, we think about forever. It doesn’t matter if we’re buying 60-percent of your business or 100-percent, our deals are as simple as a handshake. Due dilligence is quick and relatively painless. We won’t change the terms. We want to make it easy to sell your business in as little as two months.
We currently own three operating businesses, with minority interests in two others. We’re looking for new companies to acquire.
Our process is simple.
- Do we trust you?
- Do we understand the business?
- Do the numbers make sense for both of us?
Our criteria is just as simple.
- At least $500,000 of pre-tax income.
- Demonstrated consistent earning power after all true expenses considered.
- Good returns on capital employed without undue use of leverage.
- Simple businesses without need for rapid reinvention. (Boring is good.)
- A history of honest and fair dealing with customers, employees, and vendors.
There are a lot of business owners out there who want to sell all or part of their business without the hassle that traditionally comes with. If you’re one of them, there is a better way to sell your business.