What to do if Someone Offers to Buy Your Business – Straightforward Advice from the Experts
Receiving an unexpected approach to buy your business can be flattering, exciting and unsettling in equal measure.
You may receive an email, telephone call or LinkedIn message from a company, investor or intermediary saying they are interested in acquiring your business. They may describe it as a strong strategic fit, ask for an initial meeting or even suggest an indicative valuation.
Your first instinct may be to find out how much they are prepared to pay. However, before sharing information or entering discussions, you need to establish whether the approach is credible, whether the buyer is suitable and whether selling now is right for you.
An unsolicited approach can present a genuine opportunity. It can also place you at a disadvantage if the potential buyer controls the process from the outset.
Here is what to do if someone offers to buy your business.
1. Do Not Rush Into a Decision
An approach does not require an immediate answer.
Thank the potential buyer for their interest, but avoid commenting on valuation, sharing detailed information or committing to a timetable until you have properly considered the approach.
Give yourself time to think about:
- Whether you are personally ready to sell
- Whether the business is ready for buyer scrutiny
- What the business might be worth
- Whether the buyer appears credible
- What selling would mean for your employees and customers
- Whether this is likely to be your best available opportunity
Be particularly cautious if the buyer tries to create urgency by suggesting that its interest is time limited, that information must be provided immediately or that you need to move quickly to avoid losing the opportunity.
A credible buyer should understand that selling a business is a major decision and allow you time to consider your position properly.
Turning down an approach now does not mean you will be unable to find a buyer later. A strong business can still attract interest when the timing is better for you.
2. Establish Whether the Approach is Genuine
Not every approach represents a serious acquisition opportunity.
Some are carefully researched enquiries from credible strategic buyers. Others are speculative campaigns sent to large numbers of business owners. In some cases, an intermediary may claim to represent an interested acquirer without having a firm mandate.
Before progressing, establish:
- Who has contacted you
- Which organisation they represent
- Their position and level of seniority
- Why they are interested in your particular business
- Whether they have completed acquisitions before
- How they intend to fund a transaction
- Whether an intermediary has a confirmed buyer mandate
- Whether the buyer operates in your market or an adjacent sector
A personalised approach that refers to your business, capabilities, customers or market position is generally more credible than a generic message containing little specific detail.
However, a professional-looking email, familiar company name or flattering explanation should not be treated as proof that the buyer is genuine or capable of completing a transaction.
Continued below…
Assess the Approach Before Taking It Further
Our free assessment tool: Received an Approach to Buy Your Business? can help you evaluate the enquiry before you take the conversation further. Access the tool here:
3. Protect Confidential Information
Do not provide detailed financial, customer, employee or commercially sensitive information during the early stages of an approach.
Even where the potential buyer appears credible, you may not yet know:
- How serious their interest is
- Who else will see the information
- Whether they are approaching competitors
- How the information could be used
- Whether they have the resources to complete the acquisition
An initial conversation can cover high-level information about the business and the buyer’s reasons for making contact. More detailed information should usually only be shared after the buyer has been assessed and a suitable non-disclosure agreement has been signed.
Even with an NDA in place, information should be released gradually and only where it is necessary to move discussions forward.
Be particularly careful with customer lists, margins, pricing information, employee details, supplier terms, intellectual property and forward-looking financial information. These could be commercially valuable to a competitor or strategic buyer even if a transaction never completes.
4. Decide Whether You Actually Want to Sell
An unsolicited approach can introduce the possibility of selling before you have seriously considered it.
Before focusing on the buyer, consider your own position.
Ask yourself:
- Am I personally ready to sell?
- What would I do after the transaction?
- How much would I need to achieve my personal goals?
- Do I want a complete exit or an ongoing role?
- Is the management team capable of operating without me?
- Would selling now be right for the business?
- Are there improvements I would want to make first?
You should also consider the needs of your family, fellow shareholders, employees and customers.
The fact that someone wants to acquire your company does not automatically mean this is the right time to sell it.
Equally, an approach may encourage you to begin exploring an exit that was previously several years away. That does not mean you need to accept this particular opportunity. It may simply be the catalyst for understanding your options and beginning to prepare.
Our guide to preparing your business for sale explains the areas that owners should begin strengthening well before entering a formal sale process.
5. Understand What Your Business Could Be Worth
A buyer may introduce an indicative valuation early in the conversation. Treat any initial figure cautiously.
An initial offer is not necessarily an accurate reflection of what the business could achieve in a properly managed sale process. It may be based on limited information or positioned at a level designed to encourage you into exclusive discussions.
The value of a business can be influenced by:
- Sustainable earnings and cash flow
- Revenue growth
- Recurring or contracted income
- Customer concentration
- Strength of the management team
- Reliance on the owner
- Intellectual property
- Market position
- Future growth opportunities
- Risks identified during due diligence
- Current demand from buyers
Our guide to how much your business could be worth explains the main valuation methods and the factors that can influence the multiple achieved.
The structure of an offer also matters and can make a considerable difference to the attractiveness of the offer. Typical structures used may include deferred consideration, earn-outs, rollover equity, working capital adjustments or debt adjustments. All of which you need to take the proper time to consider and negotiate before you accept any offer.
A higher headline offer is not necessarily better if a large proportion of the consideration is uncertain or payable several years after completion.
Before responding to a proposed valuation, obtain an independent view of both the likely value range and the structure of the offer.
Continued below…
What is your business worth?
Use our free business valuation calculator to get a estimated range and a useful starting point.
6. Do Not Let Flattery Drive the Negotiation
Being approached is a positive sign. It suggests that someone sees strategic or financial value in what you have built.
However, it is important to separate that recognition from the commercial reality of the proposed transaction.
Buyers may explain why they admire the business, its reputation, its people or its market position. These comments may be entirely genuine, but they also help establish a relationship and encourage the owner to engage.
Problems can arise when an owner becomes emotionally committed to a particular buyer before the value, structure and risks have been properly assessed.
This may lead to:
- Accepting a lower valuation
- Agreeing to exclusivity too early
- Overlooking difficult deal terms
- Sharing information prematurely
- Making unnecessary concessions
- Continuing with a process that no longer meets the owner’s objectives
Treat the approach as an opportunity to investigate, not as an offer you are obliged to accept.
7. Avoid Agreeing to Exclusivity Too Early
A potential buyer may ask for exclusivity before investing significant time and money in the transaction.
Exclusivity prevents you from entering discussions with alternative buyers for an agreed period. It can be reasonable once the main commercial terms have been negotiated and both parties are committed to progressing.
However, agreeing to exclusivity too early can significantly weaken your position.
Once the buyer knows that you cannot speak to anyone else, there may be less pressure to maintain the original valuation, timetable or deal terms. The buyer may attempt to renegotiate after due diligence, knowing that your alternatives are limited.
Before agreeing to exclusivity, make sure there is sufficient clarity around:
- The proposed valuation
- How and when you will be paid
- Deferred consideration or earn-out terms
- Your role after completion
- Working capital expectations
- Key conditions attached to the offer
- The proposed due diligence process
- The transaction timetable
- The length of the exclusivity period
The exclusivity period should be clearly defined and no longer than reasonably necessary.
Our article on negotiating the sale of a business explains how preparation, leverage and buyer competition can influence both price and deal terms.
8. Create Competition Wherever Possible
One of the greatest risks of responding to an unsolicited approach is allowing a single buyer to dictate the process.
Even if you ultimately sell to the company that first approached you, creating credible alternatives can strengthen your position.
Competition can:
- Test whether the original offer reflects market value
- Encourage the buyer to maintain momentum
- Improve the proposed deal structure
- Reduce the risk of unnecessary price reductions
- Give you alternatives if the transaction fails
- Identify buyers offering a better strategic or cultural fit
Introducing competition is not about misleading the original buyer. It is about testing the market and making an informed decision.
A proactive buyer search may also uncover acquirers you had not considered, including international strategic buyers, private equity-backed businesses and companies operating in adjacent sectors.
Our guide to finding the right buyer for your business without losing control explains why the best buyer is not always the one that makes the first or highest offer.
9. Consider More Than the Headline Price
The highest offer is not always the best offer.
When considering a potential transaction, look beyond the headline valuation and assess:
- Cash paid at completion
- Deferred consideration
- Earn-out targets
- Certainty of funding
- Working capital requirements
- Warranties and indemnities
- Your responsibilities after completion
- The buyer’s plans for employees
- Future investment in the business
- Cultural compatibility
- The likelihood of completion
For example, a lower all-cash offer may be more attractive than a larger headline figure that depends heavily on future performance targets outside your control.
You should also consider whether the buyer is likely to protect the legacy you have built, retain key employees and continue investing in the company.
The right transaction is the one that best supports your financial, commercial and personal objectives.
10. Prepare for Buyer Scrutiny
Once serious discussions begin, the buyer will want to investigate the business in detail.
Due diligence commonly covers:
- Financial performance
- Forecasts and budgets
- Tax
- Customer and supplier contracts
- Employment matters
- Intellectual property
- Legal disputes
- Property
- Technology and cybersecurity
- Regulatory compliance
- Environmental, social and governance matters
Weak, incomplete or inconsistent information can reduce buyer confidence and provide an opportunity to renegotiate the offer.
Before entering a formal process, review your records and identify any issues that could concern a buyer. It is usually better to address or explain these matters before they are uncovered during due diligence.
Understanding what happens during due diligence can help you prepare your information, reduce disruption and prevent avoidable delays.
11. Get Experienced Advice Early
Selling a business is unlike most other commercial negotiations.
The potential buyer may have completed several acquisitions and may be supported by experienced corporate finance, legal and tax advisers. For the owner, it may be the first and only business sale they complete.
An experienced sell-side M&A adviser can help you:
- Assess the credibility of the approach
- Understand the buyer’s motives
- Protect confidential information
- Establish a realistic valuation
- Review the proposed deal structure
- Identify and approach alternative buyers
- Create competitive tension
- Manage negotiations
- Prepare for due diligence
- Maintain momentum towards completion
An adviser also creates valuable distance between you and the negotiation.
This can be particularly important if the buyer attempts to change the valuation, terms or timetable. It allows you to maintain a constructive relationship with the potential acquirer while your adviser manages the commercial discussions and protects your position.
Even where the approach appears straightforward, completing a sale can take many months. Our business sale timeline explains the preparation, marketing, negotiation, due diligence and completion stages involved.
What Happens if You Decline the Approach?
Declining an approach does not mean you have lost your only opportunity to sell.
A strong business may attract further interest, particularly if it continues to grow, strengthen its management team and reduce its reliance on the owner. You may also achieve a better result later by preparing properly and proactively taking the business to market.
Keep a record of credible approaches, even if you decide not to proceed. They can provide useful evidence of buyer appetite and may become relevant when you eventually decide to sell.
An approach that is not right today may still lead to a useful conversation in the future.
Received an Approach to Buy Your Business Assessment
Our free assessment tool provides a useful starting point.
Answer 15 straightforward questions to receive a personalised assessment of:
• How genuine the approach might be
• How likely the buyer is to be a good fit
• Buyer/seller experience levels
• Timing for you and your business
Next Steps
If you own an established, profitable UK business and would like to discuss an approach, potential valuation or future exit, speak to one of our Directors.
Entrepreneurs Hub offers a confidential, no-obligation initial conversation. We can help you assess the buyer, understand your options and decide how best to protect the value, terms and timing of your exit.
There is no pressure and no hard sell – just an honest conversation about the approach you have received and what it could mean for you and your business.
Stay Ahead of the Market
Not ready to have a conversation yet?
Our free quarterly Entrepreneurs Hub M&A Insights newsletter helps business owners stay informed about:
- UK M&A market trends
- Buyer activity
- Business valuation insights
- Exit planning strategies
- New guides, tools and webinars
It is designed for owners who may be considering a sale in the future and want to understand how the market is changing before they make any decisions.
FAQs – Had an Approach?
What should I do if someone offers to buy my business?
Do not commit to a sale, valuation or timetable immediately. First, assess who has approached you, why they are interested, whether they can fund an acquisition and whether selling now is right for you. Avoid sharing sensitive information until the buyer has been properly investigated and appropriate confidentiality protections are in place.
An unsolicited approach can be a genuine opportunity, but it should be treated as the start of an assessment rather than the start of a transaction.
How do I know if an offer to buy my business is genuine?
A genuine approach will usually come from an identifiable buyer or properly mandated adviser who can explain why your business is of interest. Check the buyer’s online presence, acquisition history, sector experience, seniority of the person contacting you and how they intend to fund a deal.
Generic language, unexplained urgency, limited knowledge of your business or reluctance to disclose the buyer’s identity may require further investigation.
Should I tell my employees that someone wants to buy my business?
You would not normally tell the wider workforce during the early stages of an approach. Premature disclosure can create uncertainty among employees, customers and suppliers, particularly when there is no certainty that a transaction will proceed.
Initially, discussions should usually be restricted to shareholders, selected senior managers and professional advisers who need to be involved.
Should I sign an NDA before speaking to a potential buyer?
You do not normally need an NDA for an initial high-level conversation, but one should be signed before detailed confidential information is shared. The agreement should clearly cover how information can be used, who can access it and what happens if discussions end.
An NDA should not be treated as permission to release everything. Sensitive information should still be shared gradually and only when necessary.
What information should I give a potential buyer?
At the beginning, provide only enough high-level information to understand the buyer’s interest and assess whether further discussions are worthwhile. Avoid immediately sharing detailed financial records, customer lists, employee information, pricing data, contracts, forecasts or intellectual property.
More sensitive information should only be released once the buyer has been verified, an NDA is in place and there is a clear reason for providing it.
How do I know whether a buyer can afford to buy my business?
Ask how the acquisition will be funded and seek appropriate evidence before committing significant time or entering exclusivity. A buyer may use existing cash, acquisition finance, private equity funding, investor backing or a combination of sources.
Their previous acquisition record, financial position and access to funding should also be assessed. An attractive proposal has little value if the buyer cannot complete it.
Does an unsolicited approach mean my business is ready to sell?
No. An approach suggests that a buyer sees potential value in your business, but it does not mean the company is fully prepared for sale. Buyers will still examine financial information, customer concentration, contracts, forecasts, management strength, owner dependency and potential risks.
You should assess both your personal readiness to exit and the company’s readiness for due diligence before progressing.
What if I was not planning to sell my business?
You do not need to sell simply because someone has approached you. Use the approach as an opportunity to review your personal goals, the readiness of the company and what the business could be worth.
You may decide to explore the opportunity, begin preparing for a future exit or decline the approach altogether. The important point is that the decision should be based on your objectives, not the buyer’s preferred timetable.
How much is my business worth if a buyer has approached me?
The value of your business cannot be determined solely by the first figure suggested by a potential buyer. Value will depend on sustainable earnings, growth, recurring income, customer concentration, management strength, owner reliance, market conditions and buyer demand.
You should obtain an independent valuation before accepting an offer or using the buyer’s figure as the basis for negotiations.
Should I accept the first offer for my business?
You should not accept the first offer without understanding the valuation, payment structure, conditions and available alternatives. An initial offer is often the beginning of a negotiation and may change significantly during due diligence.
Consider how much will be paid at completion, whether payments are deferred, whether there is an earn-out and what conditions could reduce the amount you ultimately receive.
Should I speak to other buyers after receiving an approach?
In many cases, speaking to other credible buyers can help establish market value, create competition and strengthen your negotiating position. It can also reveal buyers offering better terms, greater certainty or a stronger strategic and cultural fit.
Even if you eventually sell to the original acquirer, having alternatives can reduce your reliance on a single buyer and protect your position.
Can I negotiate the sale of my business directly with the buyer?
You can negotiate directly, but the buyer may have completed many more transactions than you and may be supported by experienced advisers. This can create an imbalance in knowledge, preparation and negotiating leverage.
A sell-side M&A adviser can independently assess the offer, manage negotiations, create buyer competition and help you evaluate the price, structure and conditions of the transaction.
When should I agree to exclusivity with a buyer?
Exclusivity should normally only be considered once the main commercial terms have been agreed and the buyer has demonstrated credible funding and intent. Agreeing too early prevents you from speaking to alternative buyers and may weaken your negotiating position.
Any exclusivity period should be clearly defined, time limited and linked to an agreed timetable for due diligence and completion.
What happens if I reject an offer to buy my business?
Rejecting an offer does not mean you have lost your only opportunity to sell. A strong business may attract further interest, and you may achieve a better outcome later after improving performance, strengthening management or running a competitive sale process.
It can still be sensible to maintain a professional relationship with a credible buyer in case your plans change in the future.
Do I need an adviser if someone wants to buy my business?
Professional advice is strongly recommended before you agree a valuation, share significant information or enter exclusivity. An experienced adviser can assess the buyer, value the business, review the deal structure, approach alternative acquirers and protect your position during negotiations and due diligence.
Early advice can also help you decide whether the approach should be pursued, declined or used as the starting point for a wider sale process.
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