A key avoidable mistake is accepting an unsolicited approach without testing the buyer, the terms or your alternatives. A prepared, confidential process can improve your negotiating position, although multiple bidders do not guarantee a better outcome.
By Tony Vaughan · Published · Last reviewed
Thinking of retiring and selling your business, maybe you want a change of direction, whatever your reason, there is no shortage of advice and online content about how to successfully sell and exit your business.
Given the abundance of experience and proven information available in the market, how do so many business owners still get it wrong? Probably the most common and biggest mistake any seller can make is marketing apathy. For example, underestimating the business sale process and failure to confidentially market the business early or for an appropriate period of time to help build and engage a range of potential buyers. If you do not do this, you run the risk of creating a ‘one horse race’ with a single buyer, a situation that warrants careful assessment of valuation, alternatives and negotiating leverage.
An unsolicited approach may be part of a broad acquisition campaign. Verify the buyer’s identity, rationale and funding before sharing sensitive information; an off-market approach is not inherently unsuitable.
Some acquirers seek bilateral negotiations and propose acquisition debt or . Assess the actual funding and payment terms rather than assuming buyer motives or inevitable outcomes.
Check any claims of a quick sale or best price. Competition can strengthen a seller’s alternatives, but a bilateral negotiation does not automatically give the buyer full control.
Compare adviser fees with the scope of work, conflicts and expected benefits. Neither fee savings nor a competitive process establish the eventual net proceeds.
A bilateral sale can be appropriate where the buyer and terms suit the seller. Independently assess price, staff implications and payment risk before committing.
If you are thinking of selling or are considering an approach from an acquirer, you have nothing to lose and much to gain by talking to an experienced ‘business sale adviser’, even if you do not plan to engage a professional.
You will only sell your business once, take your time, prepare and do it right!
Common questions
Must an unsolicited acquisition letter mean my business is undervalued?
No. Treat it as an approach to investigate, not evidence of value or an acceptable offer.
Can a one-buyer sale still be a sensible decision?
Yes, if the buyer is credible and the independently assessed terms meet your objectives. Consider the loss of alternatives before granting exclusivity.
How can a seller test an offer without launching public advertising?
An adviser can research comparable evidence and approach selected parties confidentially, subject to suitable information controls.
Does avoiding a broker fee necessarily improve sale proceeds?
No. Compare total costs, achievable terms and the work required; neither using nor avoiding a broker guarantees better proceeds.
Sources
- GOV.UK: Selling your business, GOV.UK
General information from our archive, not personal advice.
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