InSight

Exit and Growth Strategies for Middle Market Businesses

7 M&A Don’ts for Business Sellers

By Patrick Powell | Aug 15, 2012

If you’re a business owner, in all likelihood at some point you’ll become a business seller. When that time comes, as you ready your business for sale, keep in mind these key “DON’TS.”

DON’T think that selling a company is easy, because it’s not! Plan to devote a considerable amount of time to the selling process. A transaction may take six to twelve months or longer from start to finish. It may be in your best interests to hire a professional M&A advisor to guide you through the process. A seasoned intermediary knows alternative ways of structuring a deal, how to bridge gaps between buyers and sellers and will identify the qualified prospective buyers pool.

DON’T assume that a buyer who approaches you is the best candidate. A discreet and careful screening and canvassing of the market is the only sure way to ferret out the right purchaser – the buyer who needs your business and will pay a fair price for it.

DON’T take for granted a prospective buyer’s claims that financing isn’t an issue. Instead, be certain that you are talking to a firm that can demonstrate its financial capabilities.

DON’T expose yourself and your company directly to the marketplace. Confidentiality is a key concern with employees, customers and competitors.

DON’T negotiate directly, but through an intermediary who can mediate, act as a buffer, and carry on “sidebar” conversations. This will allow you to continue the day to day operations of your business.

DON’T let too much time elapse between meetings with an interested buyer. Once the process starts, keep it moving, or you may lose momentum and affect your business and the morale of your employees.

DON’T delegate important aspects of the deal to subordinates – and don’t let the buyer do so either. It is important for key players to stay in touch and to develop confidence in each other, and work directly with the investment banker who will keep the deal on track.

How to Sell Your Business at Full Value

Posted by Patrick Powell.


3 Responses to “7 M&A Don’ts for Business Sellers”

  1. […] Corporate Finance Associates most recent post is entitled: 7 M&A Don’ts for Business Sellers. […]

  2. […] Corporate Finance Associates most recent post is entitled: 7 M&A Don’ts for Business Sellers. […]

  3. […] As Patrick Powell of Corporate Finance Associates, an international middle market investment bank, recommends: […]

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