What to do when Someone Asks to Buy a Business You Own
When you’ve spent years of hard graft building a prosperous company with a strong brand, there’s perhaps no greater accolade than an approach from a fellow entrepreneur keen to buy a business you own.
In our work as corporate finance experts, we meet many business owners who have been approached by someone who wants to buy their business. In some cases, they were thinking about selling anyway. In others, it wasn’t on the cards yet but it’s given them food for thought and planted the question in their minds – “Well, is now the right time?”
Beware of flattery
It can be very flattering when someone likes what you’ve crafted so much that they’re willing to pay serious money to take the reins. However, while compliments are very welcome, they should always be taken with a pinch of salt because they can pull the wool over your eyes.
With that in mind, if you do decide you’d like to sell your business following a speculative approach, by all means go ahead but keep your wits about you…
Stranger danger?
If an enquiry to buy a business you own arrives out of the blue, the potential acquirer could well be an unknown entity so do some careful research using trusted networks and contacts who understand the market well. A corporate finance consultant such as one of the Entrepreneur’s Hub team will be able to help you get more insight and clarity around this.
Sometimes it’s difficult to tell if a prospective buyer genuinely has adequate funds and facilities in place to purchase your business. Seek professional help to determine whether they’re serious or whether they’re just kicking tyres to see under the bonnet of your business.
Practical tips
Being courted by someone who wants to buy your business can be a hugely exciting time, so we’re not trying to scaremonger or arouse unnecessary suspicion. It’s just smart to be vigilant when something as important as your business is at stake.
Have you been approached? Here’s some advice to help you avoid the common pitfalls so you can sell your business with peace of mind – and for maximum value.
- Don’t fall into the trap of being ‘romanced’ and give too much away, too soon. If the acquirer is keen, they’ll remain patient (so going at your own pace might even be a useful litmus test of how genuinely interested they are)
- Work with an experienced adviser from an early stage – because you probably haven’t sold a business before whereas they’ll have the knowledge and impartiality to ‘stand in the gap’ and negotiate the best deal for you
- Get a non-disclosure agreement (NDA) arranged before meeting potential acquirers, to protect confidentiality. Make sure it’s yours, not theirs, and get it signed by both parties (if you need an example, get in touch with us)
- Carefully prepare an information memorandum – a sales document highlighting the opportunity in more detail, under NDA
- Collate future forecasts to show buyers the scope for business growth over the next 1-3 years but never give the full financials at this stage
- Open the option up to other acquirers – if you decide it’s the right time to sell your business, don’t be afraid to invite additional interest, not just from the buyer you were approached by in the first place. You want to be confident you have got true market value for your business (plus, it gives you a plan B if another interested party drops out of the race)
Selling a business is a complex process, as Andy Fewtrell, Chairman of Up and Under Group discovered:
“Entrepreneurs Hub helped me to prepare and sell my company. Selling a company is not easy, it’s emotional, and there’s work to do. I’m so pleased I engaged the Entrepreneurs Hub team to navigate and support us through the process.”
Who buys your business matters immensely, so it’s a process that must be skilfully driven. After some careful analysis of buyer credentials early on, you’ll be able to progress to the next stage with your chosen acquirer with true confidence. Then, once you’ve negotiated and procured offers and followed due diligence with the help of your corporate finance expert, it’ll be time to secure a deal that meets your exit objectives – leaving you to enjoy the next chapter of your life.
When someone asks to buy a business you own and you need expert guidance, you’ll know you’re in safe hands with Entrepreneurs Hub. Find out more about how our central principles and proven approach can help you achieve your desired goals and aspirations by giving us a confidential call today on +44 (0) 845 067 8678 or emailing info@entrepreneurshub.co.uk
Similar Insights
FAQs – Selling your company
How do I sell my business?
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
How much can I sell my business for?
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell my business?
The timeline varies depending on the complexity of the deal and how ready the business is for sale. On average, the process takes around twelve months – sometimes less, sometimes more.
While preparing your business for sale, Entrepreneurs Hub conducts in-depth research to identify potential acquirers. You’ll have the opportunity to review and approve this list before we make any approaches. Once the business is fully prepared – often the most time-consuming step, we begin marketing it. Typically, you’ll start seeing initial interest within a few months, with follow-up meetings happening shortly after.
As these meetings progress – coordinated and facilitated by Entrepreneurs Hub, you’ll begin receiving initial offers. At this stage, we’ll help you assess the strategic fit between your business and potential buyers. When you decide to move forward with an offer, an exclusivity period begins, during which the acquirer conducts Due Diligence (DD).
The DD phase typically lasts two to three months, depending on the complexity of your business. Once complete, the sale is finalised, and you’ve successfully sold your company.
How do I sell my business quickly?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
When is the best time to sell?
Selling your business is a major milestone, and the start of an exciting new chapter, whether that means new ventures or a well-earned retirement.
In our experience, the best time to sell is when you don’t need to – when your business is performing well – not necessarily tied to the calendar. That said, timing can still play a role.
Timing the Market
Strong economic conditions, sector growth, and buyer confidence boost valuations. Don’t wait for a “perfect” market – a well-prepared, well-performing business sells in any climate.
Plan Ahead (12–18 Months)
The best outcomes come from early planning: clean financials, solid forecasting and growth potential.
Spring & Autumn Are Active Periods
The M&A market is typically busier in spring and autumn while summer and winter tend to be slower due to holidays and year-end distractions. However, the unpredictability of deals and negotiations makes this hard to target. We do deals all throughout the year – the key is to work with someone who can keep driving the deal forward whenever it happens.
Financial Year- End
Selling your business well is a long process and aiming for your financial year-end milestone is a virtually impossible task. But it is worth bearing your financial year in mind as buyers will want to review the most up-to-date accounts available.
The best time to sell is when your business is ready, and you are too. With the right preparation and positioning the right timing follows naturally.
Can I sell my business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…