How to manage your sale expectations

Successfully managing buyer expectations during the sale of your business is of major importance to ensuring the success of your business sales process. In fact, your success or failure in adequately managing buyer expectations throughout the sale of your business can make or break a deal.

From a buyer’s perspective, the potential acquisition of a business can be a daunting undertaking. The acquisition of a business is generally plagued with a high degree of stress brought on by the risks of a substantial financial investment.

Successfully managing buyer expectations during the sale of your business is imperative to fostering a high degree of trust and good faith throughout the negotiation of a deal, and minimises the chances of your deal falling over at the eleventh hour.

So what are the best ways to manage buyer expectations during the sale of your business?

1. Clearly Define Your Expectations 

Well before you consider taking your business to the market, in depth consideration should be given to your expectations with relation to the structure of a deal, including:

·      The future role of directors and shareholders

·      Your openness to deferred payment terms

·      Sale price expectations

·      The total time to complete your sale

It is important to discuss your expectations with relation to these matters, and any other matters of relevance to you in detail with your M & A advisor prior to proceeding to the market to ensure your terms will be acceptable in the marketplace.

2. Build and Maintain Trust and Rapport

Building rapport and trust early on in your discussions with potential acquirers will greatly assist you to manage the expectations of buyers during the sale of your business.  As part of this, meet prospective buyers early in your negotiations, and ensure communication is open and transparent at all times.

Be clear with prospective buyers about your expectations for the sale, and how you envisage the transaction playing out. This will help foster a two-way dialogue and promote good-faith negotiations throughout the completion of the deal.

3. Honesty is Key

Honesty and transparency are key to managing the expectations of buyers during the sale of your business. If there are major issues or problems with your business it is best to be open and transparent about these with prospective purchasers. The alternative will more than likely result in the buyer discovering those problems and issues during the latter stages of a deal, which could threaten to derail the deal and will invariably lead to an erosion of trust.

Observing these three tips will greatly assist in managing buyer expectations during the sale of your business, and as a result promote a better outcome for you in the sale of your business.

If you are seeking a professional advisor to assist you with the merger, acquisition or divestment of a medium-sized business please contact Quinn M & A on 02 9223 9166 or email to find our nearest office.