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Why Limousine Businesses Don’t Sell

Last updated on July 3, 2011 by Sozo Staff

When your limousine business doesn’t sell, it’s hard not to take it personally. But that’s just the problem. When you live and breathe a business, it’s nearly impossible to be objective about important factors, from accurate valuation to the state of the buyer market. Factor in the reality that most owners have never sold a company, and it’s no surprise that many listed businesses don’t attract a buyer. Here are some of the most common ways sellers unintentionally scare off limousine business investors – and how to avoid them.

Value

Profits are important, but they aren’t the only component of value. If you can’t identify the hidden value in your business, you’re missing out on the opportunity to target strategic buyers. Put yourself in the shoes of a potential buyer and identify how your business might help them. Could your coveted location in an expanding metropolitan area provide access to an untapped client base? Are you the only limousine business in the area to offer a party bus? Make sure you are working with a professional who can help you identify the value often overlooked by both limousine business buyers and sellers.

Market

You wouldn’t start a company without researching your target market. The same goes for selling a business. Understanding what kind of buyers might be a good fit for your company can help you appeal to their interests. If you enjoy stable profits, your business might be attractive to an investor looking for immediate income without the hassle of starting a limo business. On the other hand, a fellow limousine business owner looking for ways to expand may be more intrigued by a large account list than by owners discretionary earnings.

Pricing and Packaging

Incorrect pricing is one the top reasons businesses of all types don’t sell. If your business is priced too high, buyers may assume you aren’t serious about selling. If it’s priced too low, you may be overlooked by buyers before you have a chance to demonstrate your company’s unique value. The way a business is presented is also critical. Professional, informative documents display your business in the best possible light. If you treat your business like a valuable investment, buyers will too.

Confidentiality

When you give up confidentiality, you give up control. Spilling the beans about your decision to sell can destabilize your company and reduce value. Business deals don’t happen overnight, but let’s say that someone lets it slip to an uneducated buyer that your business has been on the market for six months. That buyer may begin to question their interest, wondering whether your company is all it’s cracked up to be. Why risk making employees nervous, giving competitors fuel to steal customers, and scaring away buyers? Keeping your decision to sell on the low-down until a deal is reached is better for all involved.

Representation

A business may be the perfect fit for a buyer on paper, but a poor fit in person. Many sellers find it difficult to accurately represent their business because they possess a natural bias. Buyers may assume a seller is inflating value. A seller’s feelings may get hurt when a buyer poses tough but realistic questions about the company. A seller and potential buyer who are known competitors may have trouble getting past awkward feelings.

For this reason, and many of the reasons previously discussed, an industry broker can act as an invaluable middleman. With the guidance of an experienced professional, you can stop worrying about the steep learning curve of selling and focus on what you do best – running a successful business.

Filed Under: Transportation

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