Startups

How to respond when someone wants to buy your business

  • 4 min Read
  • January 18, 2021

Author

Escalon

Table of Contents

Business owners and entrepreneurs are always looking for opportunities, whether that means entering a new field or cashing out of one. Most of the time, serial entrepreneurs tend to make something from scratch, develop it through its nascent stage, and when it matures and does well on its own, they sell it.


However, if and when the opportunity arises and you get an offer for your business, how would you know if it’s the correct price, or even is it the right time to let it go? Below are a few tips for every business owner on what to do when an unsolicited offer arrives.


Does the buyer know your business?




When faced with an offer, the first thing you should do is gauge whether the buyer really knows your business. Are they one of your competitors? Are they from a relevant industry? Could they be trying to broaden their portfolio? Is it some kind of investor who is trying to solicit a number of companies, and observing which one takes the bait for them to park their capital? All these answers have to be answered by you, because they have a direct relation to how much you should counterbid, or whether you should refuse the offer outright.


Is the individual among the best?




It’s likely that you are the best thing that could ever happened to your business. However, if it has to go into new hands, you want it to be with the best possible new owner. Is the individual or business who wants to buy your business up to it? Are they from the same industry? Are they good at what they do? Are they a strategic fit for your business, or is your business a strategic fit for them? This last part is very integral, as this will determine how much synergy will come from the new alliance.


Talk to us about how our outsourced services can help your startup grow in value.



Are you getting top dollar?




When you receive an offer, whether it’s your first or your fiftieth, always make sure you are getting the full valuation that you think is appropriate for your business. Simply negotiating with a random one-off buyer can have disastrous effects, and could cause your company to be undervalued. Make sure they know your business, your reputation and what they are buying into before you start negotiating.


Do you want to sell?




Just because someone comes knocking on your door does not mean you have to sell. Avoid any sudden, knee-jerk reactions. If someone gives you an offer today, it doesn’t mean you won’t get one in the future. Always remember that it’s your hard work that has made the company what it is, and got you an offer from someone who has realized the worth of what you have built. Chances are they won’t be the last. Calculate your risks, plan your future, and if your exit makes sense, then take it — but only when you are ready to do so.


You decide to sell: What next?




So, you’ve made a decision to sell. You need to consider what the new future looks like for your company. Are you looking at 100 percent dissolution? Could it lead to staff layoffs and technology infusions? Are you looking for a partner, or a background role for yourself? You’ll need to answer all these questions, and you also need to consider the other players in the firm who might have similar questions. Your colleagues and staff members will have questions about the change and you’ll need to be prepared to answer them.


M&A does not typically involve a random person coming to your driveway to give you money for your business. It’s a tricky and complicated part of owning a business that can yield great dividends for you, and you need to play it well after gauging all the possibilities for yourself.


Want more?

Escalon can help ensure that your accounting, financial records and taxes are accurately done and that they communicate the full value of your business to potential buyers. Talk to an expert today.

Talk to our team today to learn how Escalon can help take your company to the next level.

  • Expertise you can trust

    Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.

  • Quality and consistency

    Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.

  • Scalability and Flexibility

    Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.

Contact Us Today!

Tap into the latest insights from experts in your industry

People Management & HR

Benefits Administration, What Small Business Need to Know

Benefits administration can be a game-changer for small businesses aiming to attract and retain top talent. While salaries remain an...

Read More
Accounting & Finance

AAP vs. Cash Accounting: Which Method Is Best for Your Growing Business? 

Choosing the right accounting method can significantly impact how you track financial performance, manage taxes, and plan growth. Two common...

Read More
Accounting & Finance

Beyond Bootstrapping: Advanced Cash Flow Management for Scaling Companies 

Bootstrapping—financing growth through internal cash flow—is a hallmark of many successful startups. But as businesses mature past their initial stage,...

Read More
Technology & Security

Building a Scalable Tech Stack: How to Choose the Right Tools for Growth 

In today’s business landscape, technology is more than a convenience—it’s a strategic asset that can supercharge growth. But as you...

Read More
Accounting & Finance

How to Reduce Month-End Close Time Without Sacrificing Accuracy 

The month-end close can feel like a perpetual scramble—collecting invoices, reconciling accounts, fixing last-minute errors. A drawn-out close not only...

Read More
uncategorized

How to Reduce Overhead Costs Without Impacting Productivity 

Overhead costs—from utilities and rent to administrative staffing—can quietly swell until they erode profit margins and slow your ability to...

Read More
Accounting & Finance

How to Structure Your Finance Team as Your Business Scales

Growth triggers a tidal wave of financial complexity, multi-entity operations, new product lines, overseas expansion, or investor relations. If your...

Read More
Accounting & Finance

M&A Readiness: How to Prepare Your Financials for a Successful Acquisition or Sale 

Mergers and acquisitions (M&A) can dramatically alter a company’s trajectory—unlocking new markets, technologies, or customer bases. Yet, many deals stumble...

Read More
Accounting & Finance

Optimizing Working Capital: Strategies to Maximize Liquidity Without Raising Funds 

Working capital: The difference between your current assets and your current liabilities. It’s a key barometer of financial health.  While...

Read More