It happens all the time; someone asks about buying your business. Most business owners are ill-prepared to handle this question. As a result, they miss out on a golden opportunity to sell. In contrast, business owners equipped with solid answers can better respond to buyers’ questions. If the circumstances are right, the buyer and seller agree to a mutually beneficial transaction.
Three Common Business Buyers
Requests to buy a business typically fall into one of three categories:
- You receive a letter, email or phone call from a stranger that says they are interested in purchasing your business.
A lot of businesses and Mergers & Acquisitions advisors have active campaigns. Your company is on their list, possibly because of the industry that you are in, products or services that you offer, your location, or your team. One of these buyers may be a great buyer of your business. However, from the limited information they have, they truly have no idea what their real interest is in your company.
- One of your customers, vendors, or someone that you know in your industry wants to buy your business.
These potential buyers likely know more about your business than the first group. They are likely to have a specific reason why they want to acquire your business. However, they still do not have enough information to know if they are truly interested. Additionally, they may not fully understand your company’s value.
- One of your employees wants to buy your business.
For many businesses, an employee or a group of employees makes a great buyer. However, you will need to do some homework before selling your business to employees. (This topic will be covered in a future post.)
An Estimate of Value Helps You Respond to Inquiries
In this video, I talk about clients Andy and Stacy’s response when their largest vendor asked about buying their business. Andy and Stacy contacted Kelly Business Advisors, and we completed an Estimate of Value (EOV). (Read more about EOV at https://kellybusinessadvisors.com/services/eov/)
Over a short period of time, Andy and Stacy learned that buyer was not interested in buying their business after all. Instead of being a disappointment, this actually was a fortunate turn of events. Andy and Stacy learned that their business held a high value, and certain private equity groups were very interested in purchasing their company.
Benefits of an Estimate of Value for Sellers
Regardless of when you sell your business, the best approach is to have an EOV completed by a qualified M&A advisor. An Estimate of Value helps a business owner:
- Determine the M&A advisor’s value of your business
- Learn about the market for selling your business
- Receive an objective, educated opinion about how to increase the value of your business
- Develop a relationship with an advisor that may represent you in the sale of your company
Contact Kelly Business Advisors for an EOV
An EOV gives you a fresh set of eyes reviewing your financials and operations, followed up with expert insight and guidance. Bottom line, you will be much better prepared for an unsolicited offer for your company when you have an EOV on file. Contact the Kelly Business Advisors Team today to request an Estimate of Value for your company, 920-737-2579.