This is one of those questions that can’t be answered without a lot of discussion. The best buyer for a business is often measured differently by different people. Is the best buyer a Private Equity Group or a Strategic Buyer? Are we talking about the buyer who will pay the highest price before tax, the highest price after tax, the buyer who is willing to pay a very high price but wants you to finance a big portion of the sale, the buyer who pays an o.k. price but wants to retain all your employees, the buyer who wants to consolidate your business with another business and eliminate many of your employees, a buyer who wants to pay a fair price but wants you to keep running the business?
There are often many, many variables that a business owner has to consider.
Business owners often tell us that “everything” is for sale and if the buyer shows up with the right amount of money then the seller is ready to take the money and run. This is one of those things that is often said but rarely true.
Once the business owner begins serious discussions regarding the sale of their business the items with emotional importance begin to show themselves and the good business seller tries to do what’s right for themselves, their employees and their company.
The business sale process is very complicated and very, very specialized. A business owner who wants to consider a sale needs to have expert assistance in the process. There are many legal, tax, accounting, insurance and human resource issues that have technical characteristics that unless handled properly could shift significant risks to a seller in a transaction. Because the process is so complex and the mistakes so expensive, it is a good idea to have the sale process lead by one of our experienced M&A Advisors.
Before going on the market with the business we’ll spend a lot of time with business owners trying to help them understand all the moving parts in the business sales process. It’s important that the seller comes to terms with these options and requirements so that any potential buyer has a clear understanding of the boundaries of a potential deal.
Different types of buyers will want to operate your business differently after the sale. Understanding how different buyers view the future of your business can be a critical piece of a good transaction. It is a good idea for a business owner to sit down with us to discuss all the likely outcomes for a transaction and decide which possible scenarios are acceptable or desirable for the seller. If the business owner understands the business selling process and we understand their priorities the business sale process is more likely to end in a better transaction for everyone.
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