You’re going about your business like you do every day, when you get a phone call out of the blue, from a stranger with some exciting news. Someone wants to buy your business! Typically, it’s an agent or broker on the other line. In some cases, it might be the buyer themselves.
If you’re having a bad week, tired of the grind, or have always envisioned potentially selling your business, you might think to yourself, “You know what? Maybe I should do this.” Even if the offer so little as piques your interest, you have come to a forced fork in the road. Next, you’ll ask start asking your accountant, legal advisor, stakeholders, friends, and family the million-dollar question: “Should I sell?”
Before you distract yourself any further, let me tell you three ways to approach an unsolicited offer for your business.
Option 1: Negotiate
Whenever you’re selling something at a fair market price, the transaction is constructed on what a willing buyer and willing seller will accept in their negotiation. If you receive an unsolicited offer and happen to have a second buyer, you can negotiate a higher price for your business. Rarely does this occur, though. After all, your first potential buyer arrived completely unexpectedly.
Option 2: Decline
When you have an unsolicited offer that you haven’t taken to market, it’s very difficult to justify accepting the offer and selling all that you’ve worked so hard to build. Typically, the first offer is not the best offer, but rather, an opportunistic buyer looking for a deal on a business that shows upside. Between the lack of leverage, the high stakes, and the life transition of selling a business, many owners in this situation are left with little to do but walk away from the offer.
Option 3: Explore
It can be an emotional letdown to get that call, get excited, and then realize that selling a business is actually an involved and time-consuming process. Instead of approaching an unsolicited offer as a “now or never” proposition, make it a conversation starter. This is a chance for you to learn about yourself and your business, including:
- Whether you truly want to sell at some point
- Whether your business is salable as it stands
- How much your business is worth
- How much it will cost to sell your business
- How much you can expect to take home from a sale after taxes
- The legal aspects of selling
- The right buyer for your business
Don’t let a single unsolicited offer throw your life into turmoil; there’s much more to it than a sales price. Exit Consulting Group can help you realize the true potential of your business and establish your ideal transition, whether in the near future or farther down the road. Learn more about our transition consulting services.