Accept or Reject? Its not just about the money!
Wow, what a week! We are seeing increased buyer enquiry at the moment and lots of offers on businesses!
Not every offer turns into a sale, often as the buyer and seller cannot agree on a price.
Often a seller can set themselves a goal that they need to achieve for their purposes but in doing so ignore what the market value may be and as a result end up not selling their business. Before turning down an offer we always ask our clients;
1) Is it a cash offer? There are not that many cash buyers around in the market. This adds a degree of security that the deal will complete, so value it slightly more than a leveraged deal.
2) You may or may not find another better offer and it could take time. Please consider that if it takes another 6 months what this is worth to you?
We often have buyers who hold out for what they want and end up selling below their initial offer as their situation changes.
There is an opportunity costs in accepting or refusing any offers, and as in real estate the first offer is often the best offer. Of course if you accept the first offer you will never know! Before making a decision talk to some one who sells businesses on a regular basis and can understand your particular situation.