The Tricky Business of Selling Small Businesses

David Barnett explains why it’s hard to find brokers who specialize in buying and selling small businesses and offers some strategies to help owners cope with a market that isn’t really a market.

Good Morning!

Here are today’s highlights:

• Not sure if your business can be sold? Ask ChatGPT to explain.

• OpenAI introduces an AI agent that offers a hint of what businesses will soon be able to do.

• The Trump administration has paused all loans and grants. What that means for businesses isn’t entirely clear.

• “No Buy 2025:” When it comes to consumption, increasing numbers of Americans aren’t buying it.

THE 21 HATS PODCAST

This week, special guest David Barnett, who started helping owners buy and sell businesses in 2008, offers some guidance on an often-misunderstood sales process. Early on, David was a business broker. “I sold over three dozen companies for other people,” he tells us, “and it was very interesting and exciting. It was also a terrible business.” So he changed business models but has continued to do pretty much the same work. As a result, he’s amassed a lot of first-hand knowledge, much of which he shares in our conversation, including: why many owners fail to think of their business as an asset, why sellers shouldn’t be too quick to reject earnouts, why buyers should consider making multiple offers for the same business, how buyers can protect against the post-purchase loss of important customers, why businesses are selling for less than they were a couple of years ago, why there may be a smarter way to buy a business than by scouring business-for-sale websites, and why there really isn’t a true market for buying and selling small businesses.

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