Axel Jean-Francois
on
“I’ve been asking about advertising for years.”
The manager said it quietly, almost to himself, as we walked the grounds on our first visit. He wasn’t complaining. He was reporting. Years of asking, years of silence, and a property that had been waiting the whole time.
The spaces were ready to sell. The team was ready to sell them. And plenty of the families the owner’s funeral home served were choosing somewhere else when it came time to choose a cemetery. Nobody had ever said no to any of it. Nobody had said yes either.
That gap between asking and answering is what this article is about.
Where the buck stops
The phrase is said to trace back to poker. In the frontier game, a marker, often a knife with a buckhorn handle, sat in front of whoever’s turn it was to deal. If you didn’t want the job, you passed the buck to the next player. Harry Truman kept a sign on his desk that turned the phrase around, and in his farewell address he said the president “can’t pass the buck to anybody.”
In a business with one decision maker, a decision nobody makes is still a decision. An advertising budget that never gets approved is a choice. So is a section that stays unsold, or a conversation with a family that never happens. None of them show up as a line item. All of them land on the owner’s desk.
That isn’t a criticism. Most owners run their businesses well, take care of families, and make payroll, and they’ve never been asked to look at the place the way a buyer would.
What a price actually is
A price is a bet on the future.
A buyer isn’t paying for what your business earned last year. He’s paying for what he expects it to earn once he owns it, adjusted for how sure he is. Same building, same community, same staff, and two buyers can place two very different bets.
Here’s a simple hypothetical. Say a property earns $200,000 a year under its current owner. A buyer with an active sales program looks at it and sees a path to $300,000. Nothing about the land or the reputation changed. His forecast did, and his offer follows his forecast.
That extra $100,000 is a forecast, not cash in hand. Reaching it costs money and takes time, and it may not happen at all, so a buyer pays for part of it, rarely all of it. How much reaches the seller depends on how credible the forecast is and how hard the buyer has to bid to win. A lone buyer has less reason to share that upside with the seller. Several serious buyers competing for the same property can change the negotiation. The upside is real money, but the process helps determine how much of its value the seller captures.
What the buyers saw
When we first looked at this business, the financial statements told one story. The property told a bigger one.
There were spaces ready to sell that hadn’t been offered. The cemetery had never really been marketed. A good share of the owner’s own funeral families were being buried elsewhere. A longtime manager had been asking about all of it for years.
None of this was failure in the usual sense. The business was stable and the people were good at their jobs. It just hadn’t been pushed, and a buyer with a different operating plan could see exactly where to push.
Why would a buyer pay you for work he has to do?
Every buyer asks it. If the upside is real, he’s the one who funds the advertising, hires the people, and waits for results. So why should the seller get paid for any of it?
There are three reasons.
The first is what’s already built. The land, the location, the reputation, and the families already walking through the door belong to the seller, and the buyer can’t skip any of it. Building something comparable from scratch takes years and carries risk that buying doesn’t.
The second is competition. Every serious buyer is running the same math. If one refuses to pay for room to grow, another who sees the same room will. Nobody pays for upside out of generosity. They pay because losing the property costs more than sharing the gain.
The third is evidence. A potential buyer must take on faith earns a small share. Potential backed by records, real counts, and a manager who can explain it earns a bigger one.
None of that happens on its own. A buyer reading your sale materials doesn’t automatically see what’s already built, doesn’t feel the competition until there is some, and can’t weigh evidence nobody organized. Making all three visible is the work of an advisor who represents the seller: build the case, make it checkable, and bring enough qualified buyers that each one knows the others are looking. That’s what we do at Foresight.
None of it guarantees a number. What it does is decide how much of the gap is on the table to argue about, and who’s in the room arguing.
What we did
Here’s how that played out in this case. We started by asking the people closest to the property, because the manager knew things the books didn’t. Then we checked what he told us against records, and found better records than anyone had realized. Nobody had asked for them in years. We counted what was actually available instead of estimating it, and we labeled whatever was still an estimate as an estimate.
Then we told the story plainly: here’s a property with room to grow, here’s the evidence, and here’s what we can’t prove yet. We told buyers up front where the information was thin, so when better information turned up, it landed as a pleasant surprise and not a correction. Buyers can’t see your hand. They see what you can show them.
And we ran a process where more than one serious buyer had a reason to compete.
The buck stops at the table, too
A seller who has already shown stronger earnings is in a different position from one selling a promise. Upside that’s already captured shows up in earnings, and a buyer pays for it as earnings. Upside that’s still unproven gets priced lower, which is why starting to prove it before you sell pays off.
Pick up the buck
Every owner eventually passes the buck, whether to a buyer, a successor, or the next quarter. The question is whether you pass it with the upside still unproven, or after you’ve done some of the proving yourself. A buyer will pay for room to grow. You’ll get more for it when you can show it’s there.
If this sounds like you, or you could be thinking about it, reach out to us. You don’t have to be ready to sell to start identifying the upside, documenting it, and deciding which opportunities are worth pursuing. We help owners identify and document that upside well before a sale is on the table.