Why do deals fail?
Where do I begin? No starting point means no deal! In business acquisition, the motivation of the buyer must align with that of the seller. Successful deals are conducted at a reasonable price within a designated timeframe. We have seen deals fail due to unrealistic time and pricing expectations or personalities. A commercial deal expert will help you negotiate a favourable outcome.
To the buyers:
Be clear on what you are ready to pay, based on realistic performance and projected growth. Decide on the size of business you’d like to buy within a certain industry. What customers and capabilities would you like to gain when acquiring a business? The key is to resolve questions as soon as possible. Prolonged timeframes kill deals.
To all sellers:
The right buyer for your business is most likely a competitor, customer, supplier, or investor.
Confirm your business proposition. Make sure the buyer knows what they are buying (leave no stone unturned). If not, you could attract the wrong buyer – a discount buyer or a “tyre-kicker”.
Make sure that you have a good business to sell or to invest in. A business not based on a historic position rather on a future growing one. Build in a growth strategy that the buyer can implement. This will impress the buyer.
Accept certain truths:
- Buyers do not pay full price. They will pay market value prices.
- The wrong buyer yields the wrong outcome.
- A sale is complete when the buyer deposits the final amount for the business.
- Learn to let go of your business when it is time to sell it.
- Understand that you are not an expert at conducting deals. Seek advice from a commercial deal expert.
Good luck with your deals.