Many owners of companies may think they will never sell —
that is, until an offer is presented. Realizing the value contained
in that offer, and the time that will be required to get to
closing, will depend on how well the business has been run, how
organized it is, and how well connected the sellers are to the
right team of advisors. We provide below a number of traps to
avoid:
Not understanding the value
To be effective in negotiating the sale of a business, the
seller and their advisors need to have a realistic understanding of
the value of the business— including not only the top-level
enterprise value, but also how that value is derived. For example,
if the value is tied to a core group of customers, then the seller
should ensure that it has "sticky" agreements (i.e., no
early termination, assignable, etc.) in place with those
customers.
