Are you waiting for a knock on the door?

Top 5 Mistakes Business Owners Make when Selling their Business

April 10, 2024

The Emotional Journey of Selling a Family Business

June 14, 2024

Many business owners don’t want to think about selling, but for some reason which I still don’t understand, owners are good with the idea that if a buyer comes along and knocks on their door, they will consider a sale. I guess it’s the old “what have I got to lose” philosophy.

If you’re running a good business, it’s not unusual to get monthly if not weekly calls or emails from strategic or financial companies looking to buy your business. You know, the email that says you are perfect for their growth plans. It seems tempting to call them. I can tell you there are many reasons why, typically this this not a good idea.

One key reason is that you’re not prepared to sell your business when they come knocking. This is what they are anticipating, it’s a way for them to get in early before you know your value and potentially get a “good deal” on your company.

The second reason is that they do not want you to have an M&A Advisor representing you. That’s why they call you directly. Sure, you probably have a business attorney who reviews contracts and leases for you. They are there to do the paperwork once you have a deal, not to negotiate the value of the company.

The ideal situation for them is that you will respond and say “yes” you’re interested in having a conversation. You feel what harm can it do? You’ll simply have them sign a confidentiality agreement and you feel it’s safe at that point to provide them with financials and other information.

What you don’t realize is that they are now in control. They control the timing of their response. They control the discussions. They control the valuation of the company. Most likely they have completed other transactions and have a team of people to work the deal with them. Typically, their ideal situation is that you have not done this before and don’t know the process.

What do you do? Simple, tell them you’ll get back to them and then…you prepare your business for sale. By working with an M&A Advisor, they follow up with anyone that emails expressing interest and it becomes one less thing to do in your day to day operations.

A good business should always be preparing and improving their business whether you’re selling today, tomorrow, next year or down the road. At Touchstone, we have introduced a program called Exit Advantage℠ . This is specifically developed to help business owners prepare their business for an eventual sale. The fact is, everyone will transfer ownership of their business at some future point in time, that’s life. It could be planned or not planned.

At Touchstone Advisors, our goal is to maximize the value of our client’s life’s work. Contact us today for a confidential conversation.