You have probably encountered two types of clients as a business owner: those who are “just shopping, looking for a deal” and those who are genuinely interested and have a need for your product or service. As an exit advisor, I also see two different kinds of buyers. There are those who are simply looking for a deal with no true interest and those who are motivated by a genuine need or desire.
In both cases, we want to avoid the former as they represent a waste of time. The latter ones, however, may turn out to present real opportunities. With these, you may have come across a great new client or buyer for your business.
First, be skeptical of brokers or investment bankers who tell you they are representing an interested buyer. I’ve learned from experience that they are usually representing themselves, looking for a sell-side assignment, not a bona fide buyer. In the same way that you can spot a prospect who will not become a valued client, you can learn to spot unsolicited buyers who will only waste your time.
Start by qualifying their financial capability and interest in your business. Ask about their strategic reasons for acquiring your business. If they can’t give a solid answer and one that clearly makes sense to you, they probably fall into the first category and should be disregarded. By addressing this early and openly in the process, you can save a lot of time and avoid a lot of headaches.
But what about the unsolicited buyer who does have a strategic interest and financial capability? If a viable buyer comes along but you aren’t prepared to sell your business or attempt to handle the transaction alone, the deal can quickly unravel or you may end up leaving a great deal of money on the table. As always, success is rooted in planning. Even if you are not thinking about the transition out of your business, it’s never too soon to start the exit planning process.
By having and keeping your ducks in a row with a thorough and sound exit plan, you can be ready to move quickly when the right buyer with the right offer comes along. Start your exit planning today… just in case.
