“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” – Winston Churchill
Have Confidence When Buying or Selling Businesses
Selling or purchasing a business requires confidence. A seller must have the confidence that the asking price is fair, and the buyer must have the confidence that the price he or she is paying is fair. The confidence about selling or buying a business should also translate into confidence about going through the necessary stages of a business deal. These stages include signing a Non-Disclosure Agreement, making and accepting an offer, the formal due diligence phase, and closing.
The Principals of the Deal Are in Charge
Additionally, both parties must remember that they are in charge of the deal. It is they as the principals who ultimately have to live with the consequences far after the closing, and they must always assert themselves as being in control of the deal when seeking the advice or assistance of any outside parties. Such advice or assistance (from a non-broker) must be weighed properly by the principal and should always be communicated before negotiations of the deal commence.
Experienced Business Brokers Have Direct Experience Selling Businesses
- Obtaining legal advice from an attorney or tax advice from an accountant is always a good idea.
- It should be encouraged by every responsible business broker.
- But such professionals – while usually good intentioned – do not normally have direct experience selling businesses.
- Lawyers or accountants do not typically know the realities of the present day market for buying or selling businesses in Palm Beach County.
- Moreover, they and other ‘advisors’ usually get paid by the hour (by you).
- Asking an attorney if there are problems with a business deal or contract is a bit like asking a barber if you need a haircut.
- The answer is always YES!
- An intelligent seller or buyer of a business always uses a good dose of common sense and an ability to see the forest from the trees when seeking any outside counsel.
Set Parameters Prior to Dealing with Outside Assistance When Selling Your Business
A successful seller or buyer of a business must – when dealing with outside assistance – set clear parameters in place from the outset. The parameters must be that they are in charge of the deal – no one else (including the broker!). Sellers and buyers must know what terms of the deal are truly important to them and why. Buyers must have a clear understanding of what they want to accomplish during the due diligence process, as well as what can realistically be accomplished during the due diligence process for the specific business they are seeking to purchase. Outside advisors should not an can not alter this reality.
Establish Trust When Selling Your Business
Sellers should understand that once they sign a Letter of Intent or communicate a counter-offer to a buyer, then changing their mind on a key deal point will fall apart. This sometimes happens when the seller is persuaded by an outside ‘advisor’ to change their mind. Why will the deal fall apart? Because any business deal ultimately is built on trust. And although a seller may legally change their mind after agreeing to a term but before signing the final contract, doing so will eviscerate any trust on the part of the buyer.
Seller and Buyer Always In Charge of the Offer and Acceptance
The seller should always is in charge of what price they will accept for their business, and a buyer should always be in charge of what price they are willing to pay for the business. No outside party – including the broker – should force a party to make or accept an offer on a business. During the course of negotiations, the seller and the buyer should always be the final authority on what terms of the deal are important to them.
Take Control of the Deal from the Outset
Seeking legal or accounting advice for a business transaction is perfectly fine and should be encouraged. But such advice should always be given with the caveat that the principals themselves are ultimately in charge, and the advice must be given before either party commences negotiations. New terms can not be injected into a deal at the advice of an expert, or the deal will almost certainly collapse. Take control of the situation from the outset, and figure out what is important to you as the buyer or seller of a business.
Give Martin a call today at 561-827-1181 for a FREE evaluation of your business!