YOU WANT TO BUY MY COMPANY?
What To Do When Buyers Come Knocking On Your Door
By Stephen Kerr

It's flattering to have someone come to you and ask to buy your company. For high profile, successful companies it can be a weekly occurrence. But, don't start planning your vacation yet.

You need to know how to handle inquiries from business people and brokers that call you wanting to know if you are interested in selling your company. Some of these calls are very legitimate and you should be willing to listen, because even if you have not been thinking about selling your precious business - the best time to sell is often when the business is at its best and selling is the farthest thing from your mind. Remember, the business you are in is the business of making money. And for some, selling their enterprise is the best way of making money that they will ever find.

Communications companies are favorite acquisitions for a lot of individuals and corporations. A magazine, radio station, publisher, advertising agency or design firm has a sexy appeal to many people wishing to get into the communications business and who have the money to buy their way into the business. When the right person calls -don't be too possessive to listen to what they have to say.

The following are some tips on how to spot real buyers from dreamers and sharks:

A REAL BUYER:

Is knowledgeable about your industry and perhaps very informed about your company. If they are smart enough to buy it, they are smart enough to have done some research!

Uses his or her own money. Beware of dreamers who have some unseen benefactor who will put up the money after they have located the perfect acquisition. Most often, that benefactor never comes through. Real buyers make their own decisions.

Has the financial resources to act now. Not next month or next year. A real buyer has ready cash and is not afraid to spend it. There is a sense of urgency that real buyers cannot hide. Look for the real reasons that they want to buy your business. Look for desire.

Has realistic expectations of what his money will buy. Many buyers think that if they have $100,000 that they can buy a business worth $200,000 and automatically get the seller to carry the balance. Yea, sure. Many "would-be" buyers are just not educated on how to value or adequately appraise their desired acquisition.

If you are getting enough inquiries from serious buyers, you may want to seek the services of a qualified business broker or consultant. If the broker is good, he/she will screen all inquires first and only bother you with the most qualified buyers. And never, never enter into negotiations with a buyer without adequate counsel! If your attorney or accountant is not familiar with this type of negotiations, find someone who is. No matter how informal and friendly the suitor is... never sit down to that card game without your guns on the table.

I believe that every business should be run in a way that makes it attract buyers -- desired or not. If you are not interested in selling at this time - don't burn any bridges. Just tell the suitor that you are not considering selling at this time and that perhaps they might like to get back in touch with you in a few years. If, after listening to what the suitor has to say, you believe that they are serious and have the money to back up their inquiry, ask them to put their intentions in writing, along with a banking and business reference, or two. Then check them out. If you like what you hear ... it may be time to talk to your accountant and lawyer.

If you want the negotiations for your company to go quickly and smoothly, you should also spend the time to combine all of your important business records into one organized binder for We buyer and his advisors. Nothing slows the buyer down more than trying to pull the information he needs to make a decision out of the grasp of the seller - piece by piece. Long drawn out negotiations do not favor you, the seller. The highest prices are paid and the best terms are cut in quick, prudent negotiations. You will make the best deal with an enthusiastic buyer.

It's nice to be asked to the dance by that right someone and it's a good idea to be prepared for that day and plan how to respond.. Not every buyer is for real, but someday, when you least expect it, someone will come up to you... and it won't be Candid Camera.