The Value of Representation

Q: My wife and I are considering selling our call center. I feel that I am capable of selling the business myself, while my wife feels we should get an intermediary or broker. What are your thoughts on this subject?

A: Let me answer your question by telling you a personal story. We recently built a small underground cement structure called an eco chamber to house a backup power generator. When I was ready to order the generator, the generator company told me the salesman I had dealt with was no longer with the company.

The new salesman informed me that the underground structure was not approved for use with the generator I wanted to buy. However, my contractor, my electrician, and I were told several times by the original salesman that, as long as it was vented properly, the generator would work fine. With no other recourse, I retained an attorney and sued the company.

The demand letter asked for $38K in damages, which was the cost of the structure. Since I had a contractor and electrician to corroborate my story, the case looked very favorable for me to win. However, to avoid a lengthy battle, the generator company offered me $10K to settle. I requested that my attorney counter with $15K, thinking that I would end up with approximately $12K.

When I followed up with my attorney, he said that he countered with $25K, not $15K as I had instructed, as he felt we had a good case. He was right; the company agreed to split the difference and offered a settlement of $19K.

I was thrilled, but I also realized that I would not have been able to negotiate such a favorable settlement myself. I was too close to the deal; because it was my property and my suit, it became personal, thus clouding my judgment. My attorney, however, was neutral and more objective, and thus able to get me a better settlement.

The same goes for selling your business. It is your baby that you’ve grown from scratch and owned for many years; all objectivity goes out the window when the seller is directly involved in negotiations. You should listen to your wife and hire an intermediary, such as a broker; you’ll be glad you did.

Steve Michaels

About Steve Michaels

Mr. Michaels owned his own telephone answering service in Palo Alto, California and was the founder and publisher of the Connections Magazine. He has personally published over 200 TAS related articles including a monthly segment called "Mind Your Business" which was featured in Connections Magazine. He also e-mails a highly regarded newsletter called "TAS Tips" to over 1500 businesses. Steve has been a speaker for this industry and has worked for 4 major TAS/Voice mail companies including a manufacturing company, which he helped to take public.