Are we forgetting about the 75% of SMBs that never sell?

intermediary profile

August 15, 2022

by an intermediary from University of Georgia in New York, NY, USA

Rightly so, the main topic of conversation amongst the search world is always around the darling businesses with $400K+ SDE, diversified customer bases, strong margins, two stellar managers that like to be paid less than market, etc. But what about all of the businesses that will never sell?

I can't put my finger on it, but it feels like there is money to be made in the chain of events of a business closing down. Flipping hard assets (machines, computers, vehicles, appliances)? Buying accounts receivable at a steep discount? Consulting through the confusing dissolution process? What are the main pain points for a business owner that is forced to close down?

Better yet - what if you could help the intermediary get paid for representing a business that never sold? Would brokers ever introduce a business owner to someone who could help them "sunset" their business?

Thanks in advance for any thoughts!!

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commentor profile
Reply by a searcher
from University of Virginia in Atlanta, GA, USA
Small businesses going into bankruptcy or liquidation are not going to have much cash to spend on advisors. That being said there are consultants who specialize in this world. There's a lot of money to be made in large corporate restructuring, but in small business liquidations the bank will usually have incentive enough to get good prices on liquidated assets and will probably have better connections and procedures for doing so than you do as repossession and foreclosure are core parts of what a bank does.
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Reply by a professional
from Texas Tech University in 2400 Aviation Dr, DFW Airport, TX 75261, USA
There is more to that, whether selling off those discounted assets, or recovering the business for a purpose. As much as I feel good helping to save these kinds of businesses with advice or investment, I have found that many brokers or owners would rather they close than take what they are really worth. Then they end up closing and hoping for a successful liquidation.
In the end, whether it is the broker or the business owner, it comes down to pride in many of those cases.
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