Take Every Offer Seriously – The First May be Best (and Last!)

We have relationships with hundreds of potential buyers for a new business. When we get a new engagement, we communicate the particulars of the business to these potential buyers. This usually creates a buzz and some excitement around the newly listed business.

Our seller gets excited, because we have 4 or 5 serious buyers interested. We set up meetings for interviews between the buyers and seller. The mistake the seller could make in this situation would be to assume there are going to be many offers on the business. When the first offer comes along, the seller decides to hold off on that offer hoping for an auction type of atmosphere. (The offer was a solid offer, but about 85% of what he was hoping to get for his business.) In this situation, the seller decided to wait and see what other offers came in, but the first offer was the only offer. The seller decided to come back a few weeks later to the original buyer, but the buyer had already made an offer on another business.

In a different situation, we had an offer for $12M for a business, but the seller wanted $15M. He held off to see if he could get more than $12M. The seller had been ready to sell, so his lack of interest in growing the business negatively affected the value. He ended up taking $6M three years later (and financing half the deal himself!) Nobody won on this deal.

The message is that you can’t get caught up in the hype surrounding the process. You need to consider every serious offer and decide if you would be happy getting the deal done for that price. We will help you negotiate, but it would be better to get your business sold than wait too long and miss the opportunity. You might only get one serious offer!