Sure you want a big payoff, but when it comes to selling your business, money should not be the only consideration. You don’t want just any buyer, you want the best buyer. Surprisingly, sellers don’t always choose the buyers offering the most money. Would you consider a lower price for a buyer that fits the company’s culture? Would you consider an offer that’s considerably lower if it meant the difference between years of seller financing and cash at close? It’s common for deal structures to include a variety of options which must be carefully evaluated, long before you get to the negotiating table. You may not realize it, but you’re positioning and negotiating from day one of a sale. Be sure your priorities are well thought out or you might give a buyer the wrong impression. A prospective buyer may ask how long you’ll stick around after the sale and you may casually respond that you’ll be around as long as needed. Then you find out that the buyer is thinking about a two-year transition when you and your wife had been discussing a potential move to Florida. Something like that could blow up a deal. Had your initial response been that you would be around three to six months and then could provide consulting services from Florida, the buyer would not be counting on long-term support. As a seller, here are 7 important questions to ask yourself:
1. Financing – Do you prefer a higher offer with some seller financing or a lower offer with cash at close?
2. Transition – Are you looking for a quick exit? Does the buyer expect a lengthy transition?
3. Employees – Sellers are often very protective of their employees. Will the buyer relocate or replace staff?
4. Ownership – Are you looking to maintain a minority stake for yourself or your family?
5. Legacy – Most sellers don’t want to cash out and watch the company erode. Ten years from now they want to look at a successful business that they had a hand in building.
6. Real Estate – Is the buyer interested in your building? Some sellers prefer to keep the real estate and draw rental income. If the buyer doesn’t want your facility, how soon can you fill it?
7. Trust – Do you trust the buyer? Some sellers will pass up higher offers to work with a buyer they feel better about.
Even if you know your preferences, you may not get everything you want when making a deal. A reputable Business Intermediary will be sure that the right questions are asked to help you organize your thoughts, review your priorities and understand what the market will bear. In the end, you’ll find yourself in a better position to negotiate and close the deal—without sacrificing your goals. Contact the Sunbelt Nanaimo office @ 250-751-7917 or visit our local website at http://www.bcbusinessbroker.ca/.
4 comments:
It stands to reason that each firm or company will have different offerings and different depth of skills.
Business Counseling Services
Thanks for the comment. Yes, each firm and company would have different offerings and different depth of skills.
when you are going to sell your business then money is not a single factor to focus. there are many other things should be kept in mind whenever going for sell your business.
Agreed. There are many factors to consider such as the qualifications of the buyer, financing, and employees.
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