I am sure you have often heard the legend – no it really is a myth, no more than that, it’s a fantasy – about the business owner who met someone in a pub who offered £1m (or any other aspirational number) to the owner to hand over the keys and walk away. I have yet to meet that buyer or that business owner. Nevertheless, what should you do when you are approached to sell your business?
Businesses on the acquisition trail, will have a carefully thought out strategy of what they want to buy and where it will fit in with their long term growth plans. They will research the market for suitable targets. Once you have popped up as a potential target, there will be many reasons for considering your business as one to talk to. The most common reasons are to acquire: a new product line or service stream to sell into their customers, a customer base to sell their own products into, specific skills or geographical coverage. You need to find out what the acquirer’s reasons for considering you and your business because this will be a significant issue that will determine the value your business brings to them.
So there are the five initial things you should do which I will deal with in these in five successive blogs.
Step 1 – Meet and exchange information, research the acquirer