The right buyer at the right price
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Published: 23 Feb 2016
You’ve put your all (and then some) into building up a successful business and now you’re looking forward to reaping the rewards. It’s time to enjoy the fruits of your labour. But, it’s taken a long time to get to this point, so why on earth would you sell your business to the first person that comes along?
I’ve seen this very situation a number of times. I’m approached by a person wishing to sell their company after they have found a buyer, asking me to help him complete the deal.
Don’t give it away!
A price may or may not have been agreed, but having bowled headlong into the deal, giving away the details of the company, its products/services, organisation and personnel, precious highly confidential information is now the knowledge of the buyer, without any commitment to buy.
A Non-Disclosure Agreement should be signed with any potential buyers, to ensure that information on the company’s business is not used by them or publicised to third parties, prior to completing the sale.
Create a competitive market
If the seller wishes to achieve the best possible sale price for his company, he needs to create a ‘competitive market’ amongst potential buyers. Finding willing buyers can be a time consuming exercise and the seller may need to employ an outside firm to do this, so that he can continue to run the company. Ideally a seller needs to have 4 - 6 leads interested in buying his company.
Now choose the right buyer at the right price
With a number of interested buyers, the seller should offer each one in turn a 30 day period to agree a deal, subject to due diligence and contract. In that way, he can use the competition to his advantage and force each buyer to state his offer before he agrees as to which offer he may accept. If the seller states the sale price that he expects before an offer is made, that may limit the highest price he could obtain.
In these negotiations it is important to keep all potential buyers in the loop so that they do not lose interest.
David Cane of Sundial Tax & Finance Ltd helps business owners gain the best price for their business. If you would like to discuss your plans he can be contacted on 0845 177 0036 or 07749 080 806 or email.
