9 Mistakes Plumbing Company Owners Make When Selling Their Businesses

If you are the owner of a plumbing company, then you are probably like many other business owners.

You realize that you can't work forever. In fact, it may be that you do not WANT to work forever despite enjoying what you do.





Even the most successful plumbers eventually get to the place where they are ready to hang up the wrench and do something different.

You may be burned out from the daily stresses of running a business, have physical or family issues that demand more of their time, or they simply want to move on to a new challenge.

However, for many plumbing company owners who are thinking about selling their successful businesses, it's difficult to find the time to sit down and map out a strategy for exiting the business.

If you own a successful plumbing company, you probably don't have a plan in place that will facilitate your goals of selling your business quickly, without a lot of hassles, while creating a lifetime stream of income from the proceeds.

A significant portion of your retirement planning is likely predicated on the sale of your business. Exiting a business is truly one of life's most important transitions; a transition whose outcome can make or break your retirement future.

That's why it is so important to create an action strategy that will help you avoid making mistakes that can result in you running out of money in retirement.

But, do you know exactly what it will take to create such a sale? When the time comes to leave will you become so frustrated, overwhelmed and desperate that you make poor decisions that will cost you lots of money?

Knowing the answers to these questions is important, especially if you are nearing retirement and more than ready to start the process of selling your business. You must seek solutions that promise a better, more financially lucrative and less stressful way of achieving your selling goals.

Plumbing company owners who want to sell in the 21st Century must seek alternative systems for selling a business that address some of the common mistakes owners make when they try to sell their companies.

I say "try" because more often than not, sellers wind up either not selling at all or having their businesses sit on the market for months, even years, before they find a qualified buyer. Even if they do manage to find a good buying prospect, there are currently so many businesses on the market that they may wind up getting a lot less money than anticipated.

9 of the most common business exit planning mistakes plumbers make and how to avoid them:

It is not uncommon for plumbing company owners to have no exit blueprint at all. They usually either haven't given it much thought or they make assumptions about the future that may not be true.

1. Not planning at all
As the old saying goes, "it isn't a plan until it's written down." For a succession plan to be effective and implementable, it MUST be written down and reviewed by all parties involved. A plan must be clear, concise, and free of ambiguities that could cause problems later.

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Why crafting a mission statement in the beginning of your business is crucial to a successful ending

 by Heath Frantzen

Delta Business Services

“I believe that purpose and principle, clearly understood and articulated, and commonly shared, are the genetic code of any healthy organization. To the degree that you hold purpose and principles in common among you, you can dispense with command and control. People will know how to behave in accordance with them, and they’ll do it in thousands of unimaginable, creative ways. The organization will become a vital, living set of beliefs.” - Dee Hock

One of the most oft-repeated pieces of business advice ever was written by author and corporate trainer Stephen Covey, who admonished us to “begin with the end in mind.”

Covey believed that the critical piece of beginning at the end involved a carefully conceived and constructed mission statement.  He observed:

“If you don’t set your goals based upon your Mission Statement, you may be climbing the ladder of success only to realize, when you get to the top, you’re on the WRONG BUILDING.”

Covey posited that there is a two-step creation process for all things: a mental creation and a physical creation that follows the mental just as a building follows a blueprint.  If you fail to develop a firm visualization of who you are and what you want to get out of life, you give carte blanche to others to define you, mold you,  and impose their visions on your life.    

The default setting for having no understanding of your own uniqueness, values, and personal guidelines is to be forever at the mercy of the whims of those around you.

This is certainly true for business owners and you can see it happening all the time.

Without even realizing it, business owners who have developed no clear idea of who they are or what they want their business to become often find themselves limping along, putting out fires, and stuck in survival mode.   

They can barely get through the present; much less put any thought into the future.  Most of them have no plans in place for the day when they will want or need to leave the businesses.

Often times, the lack of business succession planning can be directly linked to the fact that the business never had a personal mission or purpose statement in place.

Many small to mid-sized business owners balk at the idea of developing a personal mission statement, believing it to be some kind of New Agey fluff or a high-minded exercise for the Fortune 500 crowd.

However, research has shown that truly successful people have clarity of thought and purpose and a well-defined sense of who they are in the world.  They tend to see themselves as a brand to be developed, nurtured and cultivated

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What Funeral Directors Must Know Before Selling Their Business To A Competitor

by Heath Frantzen
Delta Business Services.com

 
"I have a very highly developed sense of denial"- Gwyneth Paltrow

Nearly every study done on business succession readiness indicates that 70% or more of all small and medium business owners have no written exit plan in place.
Funeral business owners are no exception even though they know, perhaps better than anyone else, the high cost of failure to plan.

As a funeral director, you are confronted daily with painful and stressful conditions that occur when your clients don't make plans and are forced to make important decisions under duress. You probably also realize that most of this failure to plan can be traced to human beings' intimate relationship with denial.

Denial is a powerful, double-edged sword. On the one hand, it helps us cope with devastating occurrences that come our way. On the other hand, it often leads us to eschew preparation and planning in favor of crossing our fingers and hoping for the best.

Funeral directors succumb to denial just like anyone else; putting off much-needed business succession planning in lieu of a "wait and see" approach.

While most funeral business owners express an intense desire to see the businesses into which they have poured so much of themselves continue after they have retired, few have a plan in place to make that happen.

Without such pre-retirement planning, owners are opening themselves up to situations which can severely compromise their ability to sell their businesses for enough money to retire.
Many of them believe that when the time comes to walk away from the business, they will be able to sell the business quickly to a competitor for a nice price.

Why Selling to A Competitor Isn't Always A Good Idea
Over the past few years, large corporations have been buying up individually owned funeral homes in record numbers. Many directors have balked at this trend and are not interested in becoming a part of a "McBurial" chain.

It's natural, then, that when the time comes for those directors to retire; they look for other independent mortuary business owners to whom they can sell their profitable business.
However, before selling your business to a competitor, be sure you understand some of the potential adverse consequences of such a sale.


1. The would-be buyer's interest may not be genuine. In many businesses such as funeral homes, it is not uncommon for another business owner to feign interest in purchasing a competitor simply in order to gain inside information. By posing as a prospective buyer, competitors may hope to get access to your trade secrets, marketing techniques, or customer lists.
You must not give way any sensitive data until you have done due diligence and are satisfied that the prospect is genuine. One way to do this might be to ask for proof that they have the funds available to make such a purchase. ALWAYS ask potential buyers to sign a non-disclosure agreement that has been reviewed by your attorney. This can serve as a deterrent to "fakers" and protect your trade secrets during the selling process. You might also want to ask others you trust in your business about the reputation and integrity of the competitor who wants to purchase your business.

2. Competitors sometimes have a "low-ball" game plan. Selling to a competitor means that you are selling to someone who ostensibly has as good an insight into the funeral industry as do you. He or she has knowledge specific to the business that allows them to justify offering you less that the most desirable price.

For instance, competitors understand all the stresses and headaches unique to the funeral home owners; they understand the "buttons" that can cause an owner to want to sell. Because they can read you and your situation, they are not as likely to want to give you your price as an equity fund or individual buyer. Additionally, because they can perform the same services as you do, they often try and carve out the "good will" part of the business valuation.

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