Most operators only find out what their business is worth when someone else is trying to buy it from them.
By then it is too late to negotiate from a position of strength. Here is a story about what happens when you know the real number before the other side does.
A friend called me not long ago with a situation.
His business partners wanted to buy him out. He was no longer working in the business day to day but he still held his share and the profits were coming in. Good profits, from a well-located business with stable cashflow and a strong brand. The kind of situation most operators would be glad to be in.
The offer they made him was one times his share of annual revenue.
He called it a fair starting point. I called it what it was: A lowball.
Here is what his partners knew that they were counting on him not to fully understand.
There was one year left on the lease. They told him the building would need renovations to keep trading. They framed it as a risk he should want to escape from. One times revenue, take it now, before things get complicated.
It was a clean piece of pressure. Use the lease clock, use the renovation cost, use the uncertainty to make a below market offer feel like a reasonable exit.
What they did not account for was that I knew the location. I knew the cashflow. I knew what a business like that in a position like that was actually worth to the right buyer or in this case to the partners who were already running it and collecting from it.
The brand was not going to miraculously collapse. The customer base was not going anywhere. The assets had real value. The profits were real and repeatable.
One times revenue was not a fair deal. It was the opening move of people who had already decided what they wanted to pay and were constructing a case for why that number was generous.
My advice was simple.
Do not accept it. Get someone knowledgeable in your corner. A specialised business lawyer, not a general one. Someone who does these transactions and knows what levers matter.
And hold your ground.
He did. There was a lot of back and forth. His partners pushed. They used every angle they had. But he knew the business was worth more, he had someone in his corner who knew it too and he did not move until the deal reflected reality.
He ended up with a very good outcome. Significantly better than the original offer. Because he did not accept the first number as the real number.
I want to be clear about something.
I did not broker that deal. I did not negotiate it. I did not draw up a contract or sit at a table.
What I did was listen to the situation, recognise what was actually happening and point him toward the right people and the right position.
That conversation happened before any listing, before any broker, before any formal process. It happened because he trusted me enough to call and I knew enough to be useful.
That is what most of the best small business transactions actually look like.
Not a listing on a marketplace. Not a cold enquiry from a stranger. A conversation between people who know each other or know someone who knows someone, where trust already exists and the right information changes the outcome.
Most hospitality operators assume that when the time comes to make a move, the process starts with a broker and a listing.
Sometimes that is the right path. But the transactions that happen quietly, before anything gets listed, are often the better ones. Less competition. More trust. More flexibility. More room for both sides to get what they actually need.
Those situations do not happen by accident. They happen because someone in the middle understands the business clearly enough to recognise what is actually going on and connect the right people at the right time.
That is part of what I am building with The Cynical Operator. A network where operators and serious buyers can find each other before the formal process starts. Where a phone call from someone who knows the numbers can change the outcome.
Whether you are thinking about selling, thinking about buying, or just trying to understand what you have built, that network is useful. Because the people in it are having real conversations, not reading listings.
Next edition: what waiting another year is actually costing you.
If you have a situation that does not fit neatly into the standard process, something complicated, something quiet, something where you are not sure what you actually have or what it is worth, hit reply. That is exactly the kind of conversation I want to have.