What Sellers Commonly Overlook When Selling Their Companies
Although it would be optimal to prepare several years in advance, Business owners do not always have the luxury of planning before they sell their companies. Often, the need to sell occurs due to certain unexpected events, such as: disputes within the company between partners, new marketplace competition, new legislation, health issues, family issues, and more. At Sunbelt Business Brokers, Greater Bay Area, we offer exceptional and experienced planning services to help you, as a business owner, be ready to sell your business in Santa Clara County & San Jose, CA at a profit level that reflects its actual worth.
Sellers are often caught off guard due to the lack of preparation prior to the manifestation of the “need” to sell, which can translate higher risk for a new owner and equate to less value or interest to buy. Some of the unexpected issues that sellers do not anticipate when selling their companies include the following:
Low Price Offer
Sellers usually have some sort of price in mind when the time arrives sell their businesses. As a result, many businesses approach the market price on the high-end of the pricing bracket. However, the initial offer a business owner receives is often considerably lower than what they were counting on. When this occurs, sellers are commonly not prepared for the shock and immediately dismiss the deal without looking at other factors beyond the offer price. A Mergers and Acquisitions (M&A) advisor from our team can help you evaluate any offer you receive, execute a counteroffer that is backed by important value-driving factors and guide you through the process which can be emotionally draining and confusing when you simply need to sell your business at a price that makes sense to you.
Sufficient Time Commitment
A business may suffer if the seller’s time is diverted away from operating the business in order to deal with potential buyers. It goes without saying that through the sales process, a business absolutely must maintain its normal trend of profitability. Unless they have sold previous businesses in the past, sellers do not realize the amount of time required to market the business for sale, correspond with multiple buyers, weed out “tire-kickers,” protect their privacy from exposure, collect documents and information necessary for the assembly of an offering memorandum or appropriately valuing and justifying the price of the business. An M&A advisor from Sunbelt Business Brokers, Greater Bay Area can help you screen prospects efficiently and take care of documentation to save you valuable time and relieve much of the over encumbrance and distraction.
The Need to Compromise
Owners who are in the process of selling their business may not be used to the necessary give-and-take involved. As chief operators, business owners are used to having total control of situations. In order to achieve an optimum outcome for the sale of a business, the owner may have to give on some issues and stand firm on others. An M&A advisor can help you understand when emotional attachment is blurring your vision, make experienced decisions, and choose the right battles with the buyer so the best deal can be achieved and both buyer and seller can get up from the table with a transaction they are both happy with.
The Need to Consider All Parties
An owner of a midsize, or privately held, company must effectively deal with any family members, stockholders, partners, or other parties who have rights to the business. He or she must work with these parties on the agreement to sell, and also bring them on board regarding the terms in the price before listing the business for sale.