Common Goals, Common Understandings: Working with Your Buyer

18 Feb Common Goals, Common Understandings: Working with Your Buyer

Selling your business is hard work, and it doesn’t happen overnight. This isn’t like buying a new couch or even a new home. Conventional wisdom says it takes 6-12 months to sell a business – and that’s once you make the decision to do it.

During that time, you may speak with many people who are interested in your business. They don’t know your business the way you do, and they all have different ideas about why your business might be a great opportunity for them.

It’s best if you can find someone capable, someone who knows how to run a business. It’s even better if you have several good options and you can select the best one. Ideally, you will be able to find a buyer who shares your vision, someone who will pick up your company’s banner and lead it into the next generation.

The process of selling your business is full of opportunities for missteps, misunderstandings and mistakes. That doesn’t make it impossible – it just means you need to set some ground rules first.

When working with a potential buyer, keep these 10 facts in mind:

1. You do not buy or sell a business; you buy or sell a business opportunity.
2. Our common goal is to make the best possible deal for both parties based upon a fair assessment of the business opportunity.
3. The seller’s reasons for selling and the buyer’s reasons for buying probably have nothing to do with each other.
4. Fair market value and fair price are not the same thing.
5. Price depends on structure.
6. It does not matter how you get to the same price, as long as you get
7. The best deal for both parties rarely means either party gets their best deal on
8. There is more to a good deal than
9. There is no right price for a business, only a range of reasonable prices.
10. Both parties will disclose calculations and the reasons behind assumptions, but there is no reason to emotionally debate those assumptions again and

You may want to share these facts with your buyer as you work on a deal. In addition, it’s a good idea to share your reasons for selling – and to learn about the buyer’s reasons for buying. This will help you understand if you’ve found the right buyer and help you move toward finalizing the deal.

To learn more about transitioning your business, contact us.

Joel Rose

With over 35 years of experience, Joel Rose helps families – and their businesses – to prepare for the future. He offers guidance and support to help his clients create estate plans and succession plans that meet the needs of the whole family. Through his extensive professional and personal experience, Joel is known for his compassion and his ability to find a creative solution to meet each family’s needs.