Jeff Cornwall has an excellent description of what it’s really like to sell your business:
If the flirtation process of the inquiry moves ahead, next will often come some sort of letter of intent. This is kind of like a promise to go steady. Both parties agree that they are seriously interested in seeing if this can move ahead. Often there is a promise of exclusivity required, but most sellers try to avoid this to keep the buyer honest and hopefully drive up the selling price with a little good old competition. More often than not, the buyer prevails in this and the seller has to promise not to entertain other offers, at least for a little while. Somewhere in this stage the basic form of the deal starts to take place. There are confidentiality agreements that allow the buyer to get enough information to float a trial offer. Remember, the deal almost never gets better for the seller past this point, so this is where you need to negotiate hard. About 50% of the deals that get to the inquiry and deal formation stage fail to make it any further. (If you are keeping score, we are now down to 5% of those initial inquiries still being active).
Photo by Bradley….
Jag Kaurah on July 20th, 2006 at 4:10 am
Giving exclusive rights even for a limited time to a buyer makes it difficult for a seller.
Recently, I sold a manufacturing business to concentrate on my online site and despite the buyer getting up to walk away, I did not give in. Fortunately, it just turned out to be hard ball negotiations.
Gloria on August 2nd, 2006 at 3:25 am
After years of sweat and toil in creating your business, it all comes down to the negotiation of the selling price. Because you have spent all this effort in building the company, the negotiation can become very emotional.In this regards I agree that it’s similar to dating.