As the owner of a successful business, you likely receive unsolicited, or altogether random, calls and emails from potential investors and buyers looking to get a few minutes of your time. The caller seems nice enough and they pay you a compliment and mention they are looking for a business “just like yours.” If you’re not interested in selling, the conversation may end there. But for owners who may one day sell their business, this outreach is a good reminder to start planning for the day you do take that call.
Tips for When a Potential Buyer Reaches Out:
- Accept the Compliment! Appreciate that someone thinks highly enough of you and your business to approach you to buy what you have worked hard to build. While unsolicited offers should be approached with caution, this could be an opportunity to build relationships with interested buyers for future scenarios. Even if you aren’t selling your business, you may need capital to grow or take some chips off the table one day. It’s always much easier working with someone with whom you have a good rapport.
- Not Interested? Just Say So: Ignoring the inquiry is fine, but many business development professionals will keep reaching out. If you aren’t interested under any circumstance, inform the inquirer of your position and acknowledge and appreciate their inquiry. If you would potentially entertain a sale for the right price but are too busy or aren’t ready to discuss a sale currently, tell them in a straightforward way, “Thanks for the interest, but now isn’t the right time. Would you mind reaching back out in four months?”
- Be Patient: Even if you’re in an aggressive sales mode and are looking to expedite the sale of your business, reply with caution and be somewhat guarded. Listen to what they have to say and ask questions, but don’t give too much away. This is just an initial conversation, so it’s best to start slow and not make any commitments.
- Advisors Assemble! If your business is drawing interest, whether solicited or unsolicited, this is the time to put your advisory team in place. If you’re not ready to sell immediately, this team can assist with a thorough business valuation to help you understand your company’s worth and prepare for a future sale. If you have potential buyers in mind—or if you just want to understand your options—the right advisory team can lay out the path that will best achieve your goals.
Do's & Dont's
- DON’T ignore a reach-out about a potential sale completely, even if it’s unsolicited.
- DO respond and let them know if you’re just not interested.
- DON’T get too deep with potential buyers who contact you regarding intriguing deals.
- DO reach out to your advisors ASAP if you’re considering further conversations.
- DON’T try to go it alone on broad M&A processes, even if you’ve sold a business before or have a buyer lined up.
- DO bring in a team of specialists who understand the sale process and can help you avoid common traps and pitfalls.
- DON’T sign a letter of intent or make any verbal agreements on your own.
- DO consult with an M&A advisor or investment banker for advice on valuation and other letter of intent (LOI) attributes.
- DON’T go too deep with one party in the early stages as others may be interested.
- DO work with an M&A advisor with experience “running” a transaction process to create maximum competition, as competitive tension results in maximum value. The fear of missing out is real!
Understanding the Business Lifecycle with Aldrich
Whether you’re ready to sell your business to the highest bidder or positioning it for increased growth, Aldrich Advisors is here to help you manage the entire business lifecycle. Our team of specialists is dedicated to answering your questions and creating an optimal exit strategy.
