How To Respond To Unsolicited Offers To Buy Your Business
David Kauppi, of Mid Market Capital Inc., explains what typically happens when business owners receive unsolicited offers for their businesses or expressions of interest from those posing as buyers. It’s very rarely the case that these are genuine buyers and he advises caution in your dealings with them. He goes on to explain the best ways to deal with such unsolicited offers.
If you are approached by an unsolicited offer to buy your company, you might think this a good thing. We are often contacted by a business owner after he has been approached by a buyer. I don’t want to sound overly dramatic, but this rarely has a happy ending. Business Broker Chicago: Selling Your Business – Beware of the Tire Kicker
Also worth reading
Clinton Lee of UKBB explains the 10 questions you need to ask your buyer and what secrets each answer reveals.
There are several “internet courses” being heavily marketed purporting to teach people how to buy established and profitable businesses for £1 (or 100% “seller financing”). The aim is to get business owners to hand their businesses over in exchange for nothing more than a piece of paper promising to pay the agreed price but only out of future profits.
These courses typically cost £4K-£5K and are heavily over-subscribed.
What does that mean for you? It means that there are thousands of “buyers” out there who don’t have two pennies to rub against each other but have designs on acquiring your business.
In Texas there’s an apt expression to describe these folk. They are all hat, no cattle.
Michael Fekkes of ENLIGN Business Brokers talks about What Defines A Serious Buyer
Individuals who desire to purchase an established small business must be well prepared before the search process begins. Well managed, profitable and successful businesses with a bright outlook for the future are in short supply and very high demand. Business owners and business brokers alike have little patience and interest in wasting their valuable time with buyers who have not taken the appropriate steps to demonstrate that they are fully prepared to acquire a business.
Direct approaches and how to handle them:
Whether starting to contemplate an exit or still years from thinking about selling your business, a direct approach from a third party interested in your company can provoke a range of thoughts and emotions. If the approach eventually leads on to an offer for the company, you and your fellow shareholders are likely to be left with a great deal to think about, especially if you were not looking to exit yet: