Part 4: Types of entrepreneurs who want to sell their business
When I started this adventure in selling business in the spring of 2016, I thought it would be simple.
How could I not believe it after a simple ad on Facebook brought me 46 entrepreneurs (as far as I remember) who responded to that ad, wanting me to deal with the sale of their business?
It was clear that there was a great need in this field.
It was clear that the market exists since every entrepreneur once entered into a business, one way or another will have to get out of it.
For large companies there were many solutions and professional help, both locally and through international consulting companies.
But for small and medium-sized companies, with a value of at most 10 million Euros (read up to 5 million Euros normally) there was not much available: 2-3 sites with ads and about 2-3 business brokers that knew something about it.
The situation has not changed much still today – only that there are many "business brokers" converted from real estate agents.
Why wasn't it simple?
Maybe because of me. I was there in the beginning.
Perhaps the lack of uninterrupted generations of entrepreneurs (by communism) from father to son who know what it means to sell a business has contributed a lot to it.
Perhaps the confusion of this field with the real estate industry also has its contribution.
What is certain is that we soon came to the conclusion that there are only two types of entrepreneurs who want to sell their business.
To make it easier to identify them, I gave them names.
One is Basil. The other is Dan.
I have worked with both. That's how I got to know them.
I think the easiest way to get to know them is visually, as you can see in the image below:
Basil represents the troubled path of an entrepreneur to survive and take another step forward, when he can. More precisely, it is the result of the way he sees the world, how he behaves, and how he acts accordingly.
While Basil is thinking about how to sell the business as soon as possible in order to get rid of the current financial problems, with the competition, with his employees, or whatever else he has, Dan is doing well, wanting to sell because he has no one to leave it to as an inheritance. That's why he doesn't hurry with the sale. But after he decides to sell it, he is willing to do everything necessary for that. He remains 100% involved in selling his business from start to finish.
Year after year, Basil's business grows very little - in fact, most of the time it decreases. He is always overloaded with work and worries, trying to do them all alone or with as few people as possible to try to save something. He rarely uses specialists - more precisely only when it doesn't cost him.
Basil's daily concern is not to lose business. He is always suspicious of anyone and whenever the issue of money arises, he negotiates extremely hard and is satisfied only when he wins something every time he discusses and re-discusses a contract. However, he avoids making a commitment, changing his word according to his current interest.
On the other hand, Dan has an absolutely normal business, but with very good results due to the emphasis he puts on the people, on his team, on hiring specialists, on specific issues, and on strategic thinking accompanied by an action plan.
He always tries to understand, help, and encourage those he talks to. And this gives him a feeling of well-being.
He always says that "a business is good when it's good for everyone."
That is why he does not put pressure on suppliers and does not accept that someone works for them for free: he knows from experience that in doing so he cannot expect the best results.
Several times I tried to sell a business for entrepreneurs like Basil.
I didn't make it. I know only one successful example in this regard.
So I was wondering how the business of people like Basil ends?
What happens to entrepreneurs like Basil?
Especially since the number of these entrepreneurs is many... much higher than that of the Dans.
The truth is that most of the time Basil's business will go bankrupt, ending up being liquidated.
But sometimes Basil realizes that his path is not the optimal one. This usually happens about a year after trying through various intermediaries paid only on a success fee and after placing 2-3 ads "highlighted" on a few business sales sites.
He re-analyzes his business, creates a small management team, increases sales, and after another two years tries to sell it again.
This time, however, he will turn to specialists he is now willing to pay for the work.
This is exactly what turns Basil into Dan.
I remember the movie The Matrix. Exactly at the moment when Morpheus gives Neo 2 pills, making him choose one of them, telling him:
"This is your last chance. After this, there is no turning back. You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland and I’ll show you how deep the rabbit's-hole goes... Remember, all I’m offering you is the truth, nothing more.”
For me, it means that Basil finally chose the red pill.
We also chose the red pill after we learned on our own that even a discussion with Basil is just a waste of time.
Only Dan matters.
Since then, there has been no turning back for us, as well as for Neo (from the Matrix) or for some Basils.
There are two types of entrepreneurs. I named them Basil and Dan.
Basil struggles to keep the business afloat almost regardless of the methods used for this purpose.
Dan proceeds in a different way, being successful not only professionally.
In the end, Basil realizes the difference and turns into Dan, having a great chance to sell his business on the second try.