If you run a successful business, then you probably have been inundated with offers from people interested in purchasing it.
Whether you’re ready to sell today or actively pursuing a five-year plan, starting a conversation about selling your business can trigger a wide range of emotions – fear, excitement, and surprise.
Whether it’s a simple email or letter or a full-on phone call, knowing how to respond well can help you make a sound business decision and also keep prospects on the table for a later date. Following the advice in this article can help you keep interested parties on the line while you pursue your business goals.
Know the Consequences
A lot of times offers from a business come from competitors or larger companies looking to expand to a new territory. If you choose not to sell to them, they may come to your market anyways and change the way your company does business.
Make sure you read all offers so that you know what to expect going forward regardless of whether or not you choose to act on them. Selling to an emerging competitor can be a great way to exit a business early without having to worry about how your company will survive in the new environment.
Set Your Expectations
As a business owner, you should have a good idea of what your company is worth or at least the amount that you would be willing to part with it for. By knowing what you can expect to get in exchange for your business, you will be better able to evaluate any offers that you receive.
Offers that don’t meet your expectations aren’t a waste of time, however. Even if the deal doesn’t end up being what you’re looking for, it can shed light on what someone is willing to pay for your business at this point.
That information can be immensely valuable when you go to sell your business in the future. It’s a great starting point for negotiations.
Get Help From Experts
As a business broker, I help businesses respond to unsolicited offers as well as represent the buyers who make those offers.
When I send a letter on behalf of a buyer, my only goal is to start a conversation. While many buyers claim to know a lot about the businesses they want to purchase, oftentimes they are just acting based on an educated guess.
Since your business is still a private entity, we only know the information that is available on your website and in databases. This information can be skewed based on who created it. That means that the offer we prepare may be vastly different from your expectations.
When I reach out to a business owner, I’m only asking for them to hear out the buyer. If their offer seems reasonable, then you can respond with more information and a non-disclosure agreement before any serious negotiations begin.
What to Do When You Get an Unsolicited Offer for Your Business
Once an offer comes in your door, evaluate it based on what you believe your company is worth.
Even if it’s a lowball offer, respond cordially if you might be interested in selling. The buyer could not have information about your business that affects the price they are willing to pay.
Before you share any confidential information, make sure you have the buyer sign a non-disclosure agreement to protect your privacy.
If you have no interest in selling at the current time, but a reasonable offer comes in, hold onto that information to use in future negotiations.
And, as always, contact me for help. I can handle negotiations with the buyer to ensure the sale and transition run smoothly. I can also give you information on how that offer stacks up against potential counteroffers. Good luck, and congratulations on the offer!