{"id":561349,"date":"2012-06-27T03:43:13","date_gmt":"2012-06-27T07:43:13","guid":{"rendered":"https:\/\/vrbbd.wpengine.com\/vrbbgreenbay\/what-sellers-dont-expect-when-selling-their-companies\/"},"modified":"2022-01-31T12:44:38","modified_gmt":"2022-01-31T17:44:38","slug":"what-sellers-dont-expect-when-selling-their-companies","status":"publish","type":"post","link":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/what-sellers-dont-expect-when-selling-their-companies\/","title":{"rendered":"What Sellers Don’t Expect When Selling Their Companies"},"content":{"rendered":"
\n

In the proverbial \u201cperfect world,\u201d business owners would plan three to five years ahead to sell their companies.\u00a0 But, as one industry expert has suggested, business owners very seldom plan to sell; rather, selling is \u201cevent driven.\u201d\u00a0 Partner disputes, divorce, burn-out, health, and new competition are examples of events that can force the sale of a business.<\/p>\n

Sellers often find, after they have decided to sell, that the unexpected happens and they are \u201cblindsided\u201d and caught off-guard.\u00a0 Here are a few of the unexpected events that can occur.<\/p>\n

The Substantial Time Commitment<\/strong><\/b><\/p>\n

Sellers find that the time necessary to comply with the requests of not only the intermediary, but also the potential buyers can take valuable time away from the actual running of the business.\u00a0 The information necessary to compile the offering memorandum takes time to collect.\u00a0 Many sellers are unaware of the amount of their time necessary to gather all the documents and information required for the offering memorandum, nor of its importance to the selling process.<\/p>\n

There is also the time necessary to meet and visit with prospective buyers.\u00a0 An intermediary will play an important role in screening prospects and separating the \u201cprospects from the suspects.\u201d<\/p>\n

Handling the Confidentiality Issue<\/strong><\/b><\/p>\n

Owners of many companies are also the founders and creators of them.\u00a0 They can have difficulty in delegating and tend to want to make all of the decisions themselves.\u00a0 When it comes time to sell, they want to be involved in everything, thus, again, taking time away from running the business.\u00a0 Members of the management team, like the sales manager, have a lot of the information necessary not only for the memorandum, but also on competitive issues, possible acquirers, etc.\u00a0 The owner has to allow his or her managers to be part of the selling process.\u00a0 This is easier said than done.<\/p>\n

Forgetting the Others <\/strong><\/b><\/p>\n

Many mid-sized, privately held companies also have minority stockholders or family members who have an interest in the business.\u00a0 The managing owner may be the majority stockholder; but in today\u2019s business world, minority stockholders have strong rights.\u00a0 The owner has to deal with these people, first in getting an agreement to sell, then convincing them about the price and terms.\u00a0 A \u201cfairness opinion\u201d can help resolve some of the pricing issues.\u00a0 Minority stockholders and family interests have to be dealt with and not overlooked or pushed to the end of the deal.\u00a0 When this happens, many times it is the end of the deal, literally speaking.<\/p>\n

The Price is the Price is the Price<\/strong><\/b><\/p>\n

All sellers have a price in mind when it comes time to sell their companies. Most businesses go to market with a fairly aggressive price structure.\u00a0 When an offer(s) is presented, it is generally, sometimes significantly, lower than the seller anticipated.\u00a0 They are never prepared for this event \u2013 they are blindsided, and obviously not very happy.\u00a0 They turn the deal down without even looking past the price.\u00a0 Here is where an intermediary comes in, by helping structure the deal so it can work for both sides.<\/p>\n

Not Having Their Own Way<\/strong><\/b><\/p>\n

Business owners are used to calling the shots.\u00a0 When an offer is presented, they, in some cases, think that they can call all of the shots.\u00a0 They have to understand that selling their company is a \u201cgive and take.\u201d\u00a0 They can stand firm on the issues most important to them, but they have to give on others.\u00a0 Also, some owners want their attorneys to make all of the decisions, both legal and business.\u00a0 Unfortunately, some attorneys usurp this decision.\u00a0 Owners must make the business decisions.<\/p>\n

Confidentiality Leaked<\/strong><\/b><\/p>\n

There is always the small possibility that the word will leak out that the business is for sale.\u00a0 It may just be a rumor that gets started or it may be worse \u2013 the confidentiality is exposed.\u00a0 Sellers must have a contingency plan in case this happens.\u00a0 A simple explanation that growth capital is being considered or expansion is being explored may quell the rumor.<\/p>\n

\u201cKeeping Your Eye on the Ball\u201d<\/strong><\/b><\/p>\n

With all that is involved in marketing a business for sale, the owner must still run the business \u2013 now, more than ever.\u00a0 Buyers will be kept up-to-date on the progress of the business, despite the fact that it is for sale.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

In the proverbial \u201cperfect world,\u201d business owners would plan three to five years ahead to sell their companies.\u00a0 But, as one industry expert has suggested, business owners very seldom plan to sell; rather, selling is \u201cevent driven.\u201d\u00a0 Partner disputes, divorce, burn-out, health, and new competition are examples of events that can force the sale of […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-561349","post","type-post","status-publish","format-standard","hentry","category-selling-a-business"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/posts\/561349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/comments?post=561349"}],"version-history":[{"count":0,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/posts\/561349\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/media?parent=561349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/categories?post=561349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/tags?post=561349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}