It often starts the same way. A pleasant call or a well-written letter. A buyer who admires what you have built and would like to talk. Sometimes a number is mentioned, and it is a good number.
Take the call. Interest is a compliment. But understand what is happening on the other side.
They have done this before. You have not.
A buyer, whether a competitor, a private equity firm, or a larger strategic, does this professionally. They may look at dozens of businesses a year. You will do this once. That gap in experience is where value is lost.
Before you share anything
- Know your real numbers, adjusted the way a buyer would adjust them.
- Know where your business depends on you, and how a buyer will price that.
- Know your walk-away price, and what you want your life to look like after.
- Insist on a confidentiality agreement before any financial information changes hands.
Be careful with exclusivity
A buyer will often ask for a period of exclusivity early, sometimes before you have any idea whether their number is fair. Once you agree, the competitive tension that protects your price is gone.
The first number is rarely the final number
An early figure is usually conditional on what diligence finds. If diligence finds owner dependence, customer concentration, or unclear financials, the number moves, and it moves in one direction.
A buyer’s first offer tells you what they hope to pay. Preparation decides what they actually pay.
If an offer has already arrived, a short, private conversation is worth having before you reply. Often the right answer is simply: not yet.