Three Don’ts When Someone Wants To Buy Your Company

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When you have spent a lot of time launching a business, getting it off the ground and bringing in the right people, the joy of attaining success is a great thing. Seeing your instincts and decisions rewarded by hitting all of your targets and exceeding expectations brings a well-earned sense of achievement, and the validation of knowing that not only do you believe in yourself, but others believe in you too.

So when someone steps up and says that they would like to acquire your company, you’ll be hit by conflicting feelings. On the one hand, you’ll be gratified to know that someone has a  firm enough interest in your business to want to back that interest with a cash offer. There is also the sense that there might be a big pay-day in your future, offering a level of financial freedom and perhaps the chance to launch another company based on a new idea. Against that, there is the sense that you may want to hold on, that you know what it takes to make the business even better and bigger, and that you have – quite literally – unfinished business to take care of.

At times like this, you really don’t want to make a mistake. And below are three of the biggest mistakes you can make in such a situation…

Saying “yes” immediately

If you’ve spent many sleepless nights trying to get your business to this point, you may well be feeling like now is a good time to get out, cash in on your success, and take some time before taking your next step. In other words, you may have some motivation to sell. However, if you indicate that you’re keen to sell, you aren’t going to be giving your potential buyer much reason to convince you. Bear in mind that they undoubtedly have a top price they are willing to go up to, and they’re unlikely to offer that right out of the gate. It’s not necessary to fully turn down the offer out of hand, but at least ask some questions – what are their intentions for the business? Do they want to keep the same staff? – and so on.

Going it alone in negotiations

You’re an accomplished business owner – the offer sheet on the table is testament to that – and you’re going to legitimately feel confident about your talents. But it is worth remembering that unless your talents include an inside-out knowledge of corporate law as it pertains to mergers and acquisitions, you should not go into the negotiation room alone. Take advice from experienced lawyers from the likes of Accuro Maxwell and listen to what they’re telling you. A business large enough to buy you out is large enough to have a few tricks in their armory, and you don’t want to get stiffed on the deal.

Playing games

Just as it’s a bad idea to say “yes” right off the bat, the same applies in reverse. There is really no reason to try and play hard to get here. You will already have an idea of whether you’d consider selling and what your price is. Meeting with the potential buyer does not commit you to selling, so take the chance to speak to them and hear them out. If they make an offer, or intimate to you that they would be willing to offer a certain amount, tell them you’re happy to consider it and you want to consult your colleagues. Tell them this even if you don’t have any colleagues. Be composed and ready to walk away. If they sense that you’re confident, they may be prepared to up an offer.

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