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Quazar Quips© Volume 1, Issue 8

What to Do When a Competitor Wants to Buy Your Business

A competitor calls and says they want to buy your business. What you should do next depends entirely on if you’re interested in selling your business today.

If you’re not interested in selling today but may be in the future…
Thank your competitor for calling and utilize the opportunity to learn more about your competitor. For example, asking why they are interested may provide you with insight into their growth strategies and industry outlook; it may also shed some light on areas of strength or weakness for your own company. Asking how they typically value acquisition targets, if they have made acquisitions in the past, and how they typically finance acquisitions may all give you additional insight into your industry, your company, and your competitor. At some point in the future, you may be interested in exploring a sale, and any information you gather now can help inform you as to if this competitor may be a good fit in the future.

If through discussions with your competitor you become open to a sale, please ensure that any confidential information you share is treated as such. Having a confidentiality agreement in place may help provide this protection. We recommend speaking with your legal counsel prior to sharing any confidential information to ensure you have adequate protections in place.

If you’re ready to sell your business now…
If you’re ready to sell your business, we recommend retaining an experienced business broker to represent you. Your adviser will know what information is customary to share prior to a Letter of Intent or Purchase Agreement. A good broker should more than pay for themselves through negotiating in order to ensure you get maximum value for your business. Moreover, if your competitor called, it’s likely there are other interested parties that should be contacted. It may be tempting to think a broker isn’t necessary if you already have a buyer, but without a broker the risk of leaving money on the table and the risk of a deal ultimately not closing both increase.

It’s never too early to start planning an exit strategy. Please contact Adam Webb at (763) 550-9555 for a confidential, complementary analysis of how the market would treat your unique situation.

Thank you for reading Quazar Quips, a monthly newsletter discussing the Business Brokerage market for deals between $1 million and $5 million in value. Each month, Quazar Quips will keep you informed about statistics, trends, and helpful thoughts within the Business Brokerage deal space. Stay tuned for next month’s newsletter, where we will discuss some current market data and statistics. If you or someone you know is thinking about selling their business, please contact Adam Webb at (763) 550-9555.
Bruce Behm is a licensed real estate broker of Quazar Business Brokerage
Quazar Business Brokerage©, 3535 Plymouth Boulevard, Suite 210, Minneapolis, MN  55447 Want to change how you receive these emails? You can update your preferences or unsubscribe from this list