Merger & Acquisition Insights

5 Reasons Your Ideal Time to Sell Doesn’t Line Up with Your Ideal Buyer’s Time to Buy

Posted on April 28, 2017 by Spencer Tenney
  1. The seller’s exit strategy timeline is based on reaching a certain age…a factor that is irrelevant to the ideal buyer or his immediate strategic motivation to buy the seller’s business.
  2. The seller’s exit strategy timeline fails to build in a 1-2 year transition/support period following which may be a condition tied to the buyer’s ideal offer.
  3. The buyer who needs the seller’s business and who can justify paying the seller the most money mistakenly believes he cannot finance the purchase, at the present time.
  4. The buyer recently acquired another similar transportation business and is unable to consider acquiring the seller’s company for another 9-12 months.
  5. Though a buyer is willing to offer the seller a premium price, the seller currently has too much debt on his balance sheet for a sale to make sense.

Key Takeaway: If you are expecting a buyer to show up at your door step with a briefcase of cash on your 65th birthday, prepare to be disappointed. Exiting the transportation industry can be complicated and it often requires addressing many moving parts. Ultimately, he who is writing the check for the purchase has the most influence on the timing of a transaction. We have to be ready when he is ready. Because of that fact and because of the asset intensive nature of this industry, successful business sales require preparation and opportunism. You can’t control everything around you that may influence the timing of your business sale. That’s why it’s critical to proactively seek out your options, to understand your company’s current worth, and to always know what would go in your pocket from a sale at any given time. Approaching this process proactively increases the chance of your getting your sale time table in alignment with the right buyer, protects all that you have built, and creates transaction opportunities that wouldn’t otherwise be available to you. If you are trying to figure out how to get your ducks in a row, reach out to the Tenney Group team at our contact page.

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