That small business you started ten, twenty, perhaps forty years ago, is not just where you work
and what you do. It is far more – it is who you are. It defines you.

Success came at a high price – you missed family celebrations, worked holidays and handled
everything from supply chain disruptions to labor shortages. Yet in the end, your perseverance
translated to a profit-making enterprise and now you’re ready for the next chapter.
As a business broker, I’ve learned that a local business owner may find it hard to accept that all
their hard work and effort may not necessarily translate to money when they decide to sell
their enterprise. Even worse – their “sweat equity” can actually fog their vision of what a
business is worth.

The simple reality is that any potential buyer of a small business is not looking in the rearview
mirror to see what you did in the past. The buyer’s concern is the future and what lies ahead.
They want to know, what you would want to know, specifically will your business be defined by
a profitable future.

When small business owners decide to sell, one of the greatest challenges they face, is to set
aside their emotions, to realize that their experiences and sacrifices do not necessarily impact
an independent business valuation. Emotional detachment is difficult when you are talking
about something you spent decades nurturing.

Buyers also often get caught up in an emotional sense of future profitability. Some visualize
small business ownership as a cash cow that will allow them to lean back and watch the money
come rolling in.

Too many potential buyers underestimate the work involved in running a local business. Some
think they’re buying something that has already been built. They don’t understand fully
appreciate how market sector viability.

That restaurant a buyer wants to purchase is dependent on customer flow in a neighborhood
that may be on its way up or down and food costs can fluctuate wildly with the cost of gasoline,
used in trucks that deliver the food.

Emotion has its place, but to the extent possible, it should be placed on a shelf and both buyers
and sellers need to realize that small business succession needs to primarily be based on
valuations, market analysis and setting reasonable goals.