Why You Should Never Accept the First Offer

Selling your business is truly a once-in-a-lifetime event. The stakes, both financially and personally, are higher than ever. Your business is your life’s work, so selling it might be emotional. However, staying as grounded as possible is best to avoid rash decisions.

When the time comes to sell, you want to choose the offer that best reflects all your effort, the business’s current value, and future potential. One critical tip to remember throughout this process is never to accept the first offer you receive when selling your business. It might be tempting, especially if the offer is better than expected. Regardless, it’s best to wait and hold out for more. There are many reasons why it’s wise to wait and entertain other offers, but we listed four of the most common ones below.

  1. The First Offer May Not Reflect the Business’ True Value
    Experienced and sophisticated buyers in the M&A world often start with a lower offer while expecting a negotiation process. If you accept the first offer without negotiating, you’re most likely leaving money on the table that you could use for your retirement, give to your family, or use for your next business venture.
  2. The Auction Process Will be Your Best Friend
    ACT Capital Advisors’ Auction Process can help your business garner the attention of multiple qualified buyers at once, creating a competitive bidding environment. Think of the initial offer as the baseline for negotiations. By keeping your options open during an auction, you indicate that all buyers must bring offers with the highest dollar amount and best deal terms possible before throwing their hat in the ring.
  3. You Want to Encourage Thorough Due Diligence
    If you jump the gun and accept the first offer for your business, you can accidentally rush the entire deal. By allowing time for more offers to roll in, you give yourself and all the potential buyers ample time to conduct due diligence in the most thorough manner. During due diligence, you may discover unique selling points that put you in an even better position and justify a higher price.

    ACT’s Auction Process has resulted in an industry-leading 89.7% closing rate, with 80.25% of ACT clients selling for an average 21% premium over enterprise value. By rushing through due diligence, you may miss out on key components of your business that could increase your business value more than you ever thought possible.
  4. More Offers = More Negotiation Power
    At the end of the day, you aren’t just selling a physical asset or entity. You’re selling an entire brand, image, culture, and oftentimes, your life’s work. Waiting to review as many other offers as possible ultimately gives you more control over the process. The sale isn’t just about the price – you also want to ensure you pick the deal with the most favorable terms.

It’s best to approach the sale of your business with preparation, patience, and with the guidance of a trusted M&A advisor. Your business is more than just a financial asset; it’s a testament to your hard work, dedication, and entrepreneurial spirit. It deserves an exit strategy that acknowledges its true value.

Your Business Deserves the Best
ACT Capital Advisors helps you sell your business to empower your dreams. With our robust network of buyers and team of experienced professionals, we’re here to ensure that you never settle for less than your business is worth.

Don’t go it alone – take advantage of our decades of experience and proven track record in successful M&A transactions. We’ll help you find the right buyer and negotiate the best possible terms to meet your personal and financial goals.

Contact us today to see how we can help you maximize your business’s sale value while simplifying the process. It’s time for your successful exit strategy.

Reach out to one of our experts now and start your journey with us.

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