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The disadvantage of responding to a direct letter or email about selling your business

Most business owners over 50 receive regular approaches about selling their business. When you receive a direct letter or email expressing interest in acquiring your business, it can be flattering and tempting to engage with the potential acquirer. However, doing so can result in a loss of competitive tension and put you at a disadvantage during negotiations. This post explores some of the motivations behind buyers seeking off-market business opportunities, especially retirement-based business sales.

Loss of Competitive Tension. By responding to direct letters or emails, you risk losing the competitive tension that arises when multiple buyers express interest in your business. This competitive tension can drive up the sale price and lead to better terms and deal completion certainty for you as the seller. Engaging with an unsolicited buyer can diminish your leverage, as they may perceive that they have exclusive access to your business. Choice of more than one buyer interested in your business will always be your best option.

Lack of Expert Representation When you engage with potential buyers directly, you may not have the benefit of professional representation, such as a business adviser, broker or solicitor. This lack of expert guidance can result in mistakes during the negotiation process, a lower sale price, or unfavourable commercial terms.

Motivations for Off-Market Business Acquisitions Buyers interested in off-market businesses may be seeking an advantageous position in the acquisition process. By approaching you directly, they can avoid competition with other buyers, potentially leading to a lower purchase price and more favourable terms for the acquirer. These buyers may be motivated to capitalise on a perceived vulnerability in your business, for example your age and pending retirement plans.

The Advantages of Working With an Experienced Business Adviser To maintain competitive tension and maximize your chances of a successful sale, it’s crucial to work with a professional business broker. A broker can help you maintain confidentiality, screen potential buyers, and provide expert guidance throughout the transaction process. By working with a broker adviser, you can ensure that your business is marketed effectively and that you obtain the best possible outcome from the sale.

Conclusion Engaging with unsolicited buyers through direct letters or emails can be detrimental to your business sale process. To protect your interests, it’s essential to maintain competitive tension and enlist the help of a professional and proved business adviser. By doing so, you can ensure a successful sale and the best possible terms for your business.

If you have received a direct letter and would like to speak in confidence and with no obligation about your options please email tony@vexus.co.uk


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