Basically, there are three major negotiation methods.
1. Take it or leave it. A buyer makes an offer or a seller makes a counter-offer – both sides can let the “chips fall where they may.”
2. Split the difference. The buyer and seller, one or the other, or both, decide to split the difference between what the buyer is willing to offer and what the seller is willing to accept. A real...Read More
Due diligence is generally considered an activity that takes place as part of the selling process. It might be wise to take a look at the business from a buyer’s perspective in performing due diligence as part of an annual review of the business. Performing due diligence does two things: (1) It provides a valuable assessment of the business by company management, and (2) It offers the...Read More
A solid, factual and compelling offering memorandum maximizes the chances of not only selling a business, but obtaining the highest possible price. An offering memorandum is also referred to as the selling memorandum, a confidential descriptive memorandum, or simply as “the book.” The memorandum, regardless of the terminology used, must be as factual as possible, but the Executive Summary...Read More
Important questions to ask when looking at a business…or preparing to have your business looked at by prospective buyers.
• What’s for sale? What’s not for sale? Does it include real estate? Are some of the machines leased instead of owned?
• What assets are not earning money? Perhaps these assets should be sold off.
• What is proprietary? Formulations, patents, software, etc.?
• What...Read More
A January 2004 survey conducted by the DAK Group/Rutgers found the following breakdown of why businesses are for sale:
Reasons To Sell
Risk reduction 44%
Competition or market changes 41%
External pressures 27%
Lifestyle factors (age, health, etc.) 14%
Lack of capital 9%
Ownership/management issues 07%
Note: Multiple responses allowed; Source: DAK Group/Rutgers
It is...Read More
