Selling Your Business - Unsolicited Offers (Challenge or Opportunity)

By Darren Cherry

After many long hard years, you have finally built a successful business. It is no surprise that you receive a call out of the blue from someone with a genuine interest in purchasing your company. Now for some, this is not the first time, but it just happened to be a time when this thought has entered your mind.

In early May, the BOD of Twitter faced a similar dilemma when Elon Musk offered $44 Billion to purchase the company. At this stage, the BOD could have said no, engaged an advisor to market the business, or accepted the offer and engaged in a “proprietary deal.

Like many unsolicited offers, the offer from Mr. Musk represented a premium to the market (or at least what others thought the business was worth), and the board accepted. (Now, for comparative purposes, I’m ignoring the complexities of a public company).

Next was an intense buyer-seller dance over the volume of what we call a “known unknown.” Followed by a series of on-off deal announcements.

There are plenty of unsolicited offers that are closed without much of a challenge. But in the Seller Beware category, many of these offers become problematic.

The first challenge that many small-medium-sized business owners face is a personal one, loss of control.

🟥STOP – don’t read past this like it doesn’t apply to you. T

here are very few owners that don’t fear a loss of control. In this case, for many of us, it is our once-in-a-lifetime retirement influencing event, so our control senses are acute.

When you have multiple potential buyers, you have a process that is more likely to accomplish the following:

1.)    Predictable Timeline (somewhat 😊)
2.)    More price stability during the process
3.)    Better deal terms and structure
4.)    Shorter completion window (which ironically is the promise of an unsolicited offer)

Of course, embedded in this conversation is the assumption that your business is ready to transfer and you are clear on your exit priorities.

So if you are contemplating an exit, DM me to get my exit checklist.

Remember, “If You Think You Need To Learn More – Then DO IT”