Selling a Business When It’s Not For Sale:
The Offer
7 March 2022: Selling a Business When It’s Not For Sale: The Offer
You could be running your business for years with no thought of selling when, out of the blue, someone shows up who wants to buy it.
If you’ve read the About Us section of our web site, you know that’s what happened to me. In fact, that experience – and one a few years later when I tried to buy a business – was what turned out to be the catalyst for launching Worldwide Business Brokers more than 20 years ago.
Selling a business when it’s not for sale starts with a surprise call or contact.
The current market is so frothy that business owners who’ve never thought about selling are getting approached by buyers. We’re regularly contacted by such owners asking for advice. With that in mind, it seemed like a good time to discuss what happens when an unsolicited offer lands on an owner’s desk. This post is the first in a planned series to help business owners – and real estate agents – understand four or five of the more salient aspects of the process of selling a business.
In this post, we discuss “The Offer”.
The Call
The call may or may not interest you – but I guaranty it will intrigue you. At the very least, you’ll begin to wonder what your business is worth.
But for the purposes of this discussion, we’ll assume that the call interests you – and when that happens, other questions start bubbling up; What would I do if I sold? What will happen to the business I’ve built? What will the tax consequences of a sale be? What will happen to my employees? To my customers?
And most pressing, what happens next?
We offer a comprehensive coaching program tailored to Realtors, business owners and anyone interested in buying or selling a businesses.
If you’d like to learn more, email me at
jo*@Wo*******************.com
But before we start discussing those issues – all of which will be tackled during this series – let’s get the terminology straight.
You didn’t receive an offer. You received an invitation to hand over your confidential information to someone who may or may not be an acquirer – or a potential acquirer’s representative – who may or may not ever make an actual offer. It’s not unheard of for competitors looking information about their competition, or business brokers fishing for a listing, or just nosy members of the local community posing as a potential buyer to contact a business owner seeking information about the business.
As you can probably imagine, any legitimate buyer will want to see everything about the business; the financials, the contracts, employee records and pay, vendor and client lists, wholesale costs, leases, tax records, etc., etc., etc. Your caller may start asking seemingly innocuous questions about the possibility 
that you’ll sell and slowly begin to ask for more specific and business-sensitive questions. But this is data that must remain “locked up” – in the vault, as it were – until such time as you “know” your buyer and important preliminary conditions have been met.
Do you know if you’re dealing with a “real” buyer? Probably not.
Besides that, even once you know that your “buyer” is real and may actually be serious, this information must be parceled out. There can’t be a “data dump”.
A business owner has to understand that, in order to maintain control of this situation – including the confidential information that any purported “buyer” will want to see – a degree of skepticism must be constantly applied to all communication.
When we get calls from owners that have received unsolicited queries about selling, we harp on this very important posture and urge them to find a professional business brokerage – whether our firm or some other – to help them navigate what will most likely be some very treacherous shoals if dealt with alone.
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REALTORS! Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses“, teaches you how to value and sell businesses.
Don’t Miss Out on the Coming “Silver Tsunami”!
When I received a “solicitation” for my business back in 1997, I had no idea who to call. I started with a couple of trusted friends who were also business owners and ended up with an attorney friend who, as it turned out, had limited experience with negotiating business transfers.
Who Made That Call?
You have to know the buyer. And you have to be able to verify that the purported “buyer” is legitimate?
Someone – business owner, broker, attorney – working in the owner’s best interest has to be working for the owner so that everyone on the owner’s team knows who we’re dealing with.
When a business owner decides to sell, we always counsel them to assemble the right talent to make sure they have the best chance of bringing about a successful sale at the best possible price and terms. This is even more important when an offer lands on the desk of an owner who has never even thought of selling.
“A Business Broker is on Line 2”
At the beginning of this missive, I mentioned that someone might show up out of the blue expressing an interest in your business. That someone might, in fact, be us. (Though we would NEVER identify ourselves as business brokers to anyone other than the business owner. Confidentiality starts at the first contact!)
While our clients are usually the sellers, we also work as buyers’ brokers. But regardless who has hired us, we owe all parties in any potential transaction a duty of fair dealing. When we, as representatives of the buyer, approach a business owner we provide the buyer’s bona fides to give the business owner the assurance that our buyer is legitimate, adequately funded and quite serious about acquiring a business.
We urge the owner to hire professional representation but, as often as not, they’ll ask if we can assist them – even though we’re working for the buyer. Such a relationship amounts to “dual representation” and before we can proceed on that basis we have to get the approval of both buyer and seller.
Dual representation is a fine line to walk in our business and the documents that the parties sign have to clearly outline our duties and responsibilities to both parties and contain an explicit acknowledgement and permission from the parties that we can act as representative for both sides. Some jurisdictions prohibit dual representation which requires the “other side” to hire its own talent.
But the important point here is that the seller must have the right talent to advise them, whether the call came “out of the blue” or as a result of the owners spreading the word that they’d like to sell.
The Bottom Line
When the call comes in, you’ve not received an offer. At best it was an expression of interest from someone or some company that MIGHT be interested in acquiring your business – if your business is attractive enough. At worst, it was a furtive attempt to steal; your employees, your clients, your pricing strategy, your proprietary technology or anything else of value that, without maintaining that “degree of skepticism”, you might unwittingly provide.
But any legitimate buyer will rightfully request all sorts of your proprietary information – but there’s a time and set of conditions that must be met before that information is disclosed.
This aspect of the process alone argues for the owner to grasp the need to assemble the right talent.
The next topic in this series on selling a business when it’s not for sale – the value – is the subject of next week’s post. Make sure you subscribe so you don’t miss it.
If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.
I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.
Joe
Searching For…
We have a buyer for industrial and environmental services business with at least US$2 million in SDE located in the U.S and Canada.
If any of you know of something that might fit, please let me know.
#business #businessacquisition #sellabusiness #becomeabusinessbroker #businessbrokering #businessvaluation #MergersandAcquisitions #buyabusiness #sellabusiness #realtor #realestateagents
The author is the founder of Worldwide Business Brokers and holds a certification from the International Business Brokers Association (IBBA) as a Certified Business Intermediary (CBI) of which there are fewer than 1,000 in the world. He can be reached at
jo*@Wo*******************.com