Unraveling the Seller’s Predicament

Selling a business isn’t always 100% about the price.  It is not like selling a house where typically the most important factor is who places the highest offer.  In the end, if the seller is to achieve the most optimal results, there are other variables that should be considered. 

The idea of selling to a competitor is one that seems attractive to many business owners.  After all, a competitor has the built-in advantage of understanding the business and thus can theoretically understand the value of the business better than an outsider.  But while this point is quite valid, selling to a competitor comes with its own problems.  Selling means disclosing a great deal of confidential information, and that could prove to be very risky if the deal were to fall apart.

A second avenue that sellers will often explore is selling to a financial buyer.  A financial buyer is likely not to be a competitor.  But on the downside, a financial buyer may be unwilling to pay the seller’s price.  It is important to remember that a financial buyer is considering buying the business with the intention of selling it for a profit within a few years.

The highest selling price may come from a strategic acquirer.  But this doesn’t necessarily mean selling to a strategic acquirer is the most prudent course of action for a seller.  A strategic acquirer may not have the best interests of the company at heart.  When a strategic acquirer takes ownership, key employees and management may be replaced.  The company may even be moved.  Many owners are unprepared for the shock that may come along with a strategic acquisition.

There are other potential buyers, many of whom are frequently overlooked, who may be the optimal fit for a given business.  It is possible that the best buyer for a company could be one of its employees.  However, this option comes with risks as well.  Key employees and management may leave if the deal falls through, as they now know that the company is for sale.

Finding overlooked buyers is what business brokers do best.  Matching the right buyer with the right business is both a science and an art.  Teaming with the right business broker or M&A advisor can open up a range of new avenues and help a seller reach the kind of buyer that is as close as possible to the perfect fit.

Copyright: Business Brokerage Press, Inc.

New Africa/BigStock.com

The post Unraveling the Seller’s Predicament appeared first on Deal Studio – Automate, accelerate and elevate your deal making.

Businesses For Sale

Sell Your Business

Sell Your Business

When selling your business, you need to have an expert Business Broker. Trusting the sale of your business to anyone else could end up permanently damaging the value of your business. Confidentiality is of absolute importance in selling your business. Selling a business without anyone finding out your business is for sale requires a specialized skill; it is one that Jim Tharp Realty has perfected over decades. Since 1969, we have successfully sold over 1,000 businesses and that number grows every day.

Read More

Buy a Business

Buy a Business

Working with Jim Tharp Realty means you will have the elite in Business Brokering at your side, ensuring you the highest chance of successfully acquiring your dream business. We are dedicated to working with you every step of the way. With Jim Tharp Realty, you’ll have a guide to help you navigate the precarious process of buying a business. Regardless of whether you are a seasoned Buyer or this is your first business, we can help.

Read More

Join our email list to learn about our latest opportunities

We Respect your Email Privacy

Afilliations

 
 
Jim Tharp Realty is thinking about all of those affected by COVID-19. Visit our Resource Center for helpful information for businesses.Learn More
+ +