By Shelby Schagrin, Managing Director – Investment Banking
Currently, valuations are high and the market is very strong for middle-market businesses. As a business owner, it’s possible you have been contacted already by someone who appears to be interested in buying your business.
In this seller’s market, it is very likely that more and more potential buyers will be knocking at your door. How should you respond?
While it might be gratifying to be contacted about a potential sale, you should be cautious and careful in how you proceed. Sometimes it can be difficult to determine who is a “real” potential buyer as opposed to someone merely looking for information or a bargain.
How do you know if you should move forward with a deal? First and foremost, you need to have an exit strategy. Don’t be reactive; you want to be proactive regarding exit options for your business. Understand that selling a business is one of the most significant financial decisions in your life. Make sure you are prepared so that any sale goes according to your plans and fits in with your strategy.
When approached about a potential sale of your business, do not move forward casually with any suitors, regardless of how appealing any deal might appear. You should start by simply obtaining the basic contact information of the potential buyer and let them know that you will contact them when the time is right for you. This will save you from frustration, disappointment and possibly wasting significant time on sale discussions that may not result in a successful transaction. You’ll want to come to the table with your complete plan in place, so that you can effectively negotiate a deal that is in your best interest.
If you have a goal of selling your business, you will want to enlist the professional assistance of an investment banker. The Investment Banking department of Benjamin F. Edwards & Co. specializes in selling middle-market companies. Learn more by contacting your financial consultant.