Most For Sale By Owner,
tend to either underestimate or grossly overestimate the value of their business. For those FSBOs who had no trouble at all and sold their business within months of offering it for sale, chances are they sold their company at thousands of dollars below what it was truly worth. If the deal was not structured properly, they may unwitting leave themselves legally exposed, an oversight which may come back to haunt them in the future. FSBO’s who are unaware of the true value of their business run the risk of selling their company to a bottom-feeding buyer who will utilize great negotiation tactics to obtain favorable terms and a great purchase price. This wise buyer did not want to give the business owner time to realize he was selling the golden goose! After shrewd negations, a take it or leave it offer was made, the business changed hands, and the new owner laughed all the way to the bank.
Then there are those FSBOs who languish on the market with businesses offered for sale at twice the actual value, wondering why no buyers are showing up to knock on their doorstep. In the meantime, the employees start to leave, one by one, worried about the impending sale, or non-sale, worried about job stability, about new management, etc. The owner is putting so much time and effort into the sale of their business that the business itself begins to suffer, revenue declines, morale suffers, and overall company value drops even further. Not a good plan for selling a business.