New York City finally announced the results of the Mayoral primary. As per a variety of sources I deduced because of ranked choice voting this election was slower and more troublesome than usual (like announcing results that included over 100,000 ballots used to test the new system).
But let’s not go over their inefficiencies, let’s look at why (as per experts) and how it relates to businesses, especially those wanting to sell (for top dollar). As per the reports, the election board is filled with people who have been there way too long, has (political) cronyism, and nepotism, which makes for a culture none of us would want in our companies. As it relates to small business:
Nepotism – and it’s not always bad to have family members in the business but look at this situation. The owner of a nice, growing, and profitable business has his two sons working for him and they are key employees. He needs the money from the sale to retire but says the sons don’t have enough for a down payment (even with a bank/SBA loan at about 10% from the buyer). A first reaction of any outside buyer is going to be, what are the sons going to do if dad sells to me? It’s solvable (we’re meeting soon to go over options) but it will take more time, effort, and money than if the planning had started three years ago (there’s a story in If They Can Sell Pet Rocks Why Can’t You Sell Your Business (For What You Want?) about a couple that planned to transition the business to their son).
Old, long-term employees – an owner states how many of the employees have been there 20-30 years and what I hear is they’ll all be retiring at about the same time. The situation is amplified when there are three or four owners who all want to sell and leave. A good succession plan phases the owners out over time so when it’s time to sell the whole management team doesn’t have to be replaced at the same time.
Culture – the NY election board (supposedly) has a culture of, “Who cares when the work gets done, I have things to do.” Things like go to the gym, run personal errands, long lunches, etc. In a business, a lifestyle culture is sometimes seen as an opportunity and sometimes as the threat. When an owner told a buyer his sales team and he work just enough to make the income they want, it scared off the buyer. He saw opportunity but it would take effort. He knew (from his meetings) these people weren’t going to change. They’d either keep working with limited results or leave. And having to hire a new team is a sign of disaster.
A lot of what it takes to eliminate the big red flags a buyer sees as lowering value are not hard to fix. They take time and effort. Get an experienced guide, pay attention to the details, and allow enough time to do it right.
“If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner.” H.L. Mencken
“Tradition is the living faith of the dead.” (Historian) Jan Pelikan