Sales Price Is Only One Facet of an Acquisition

You’re selling a web business and you’ve received two offers, one for $250,000 cash and one for $225,000 cash. Which offer do you choose?

Although many would jump the gun and pick the $250,000 offer, the correct answer would be to first ask about the deal terms. The buyer offering $250k may require one month of due diligence, one month of full-time post-sale transitional support, and one year of standby support. The buyer offering $225k may only require one week of due diligence and only a few weeks of support.

In the above example, buyers who value their time highly would likely take the $225k offer, even though it’s $25k less than the $250k offer. In short, there are many facets that need to be negotiated with potential buyers. To name a few: due diligence time frame, post-sale support and training, closing date, sales price, and financing (cash, seller financing, SBA loan, holdbacks, etc.).

A common mistake sellers and some brokers make are to halt discussions with potential buyers when they think they’ve found the “one”. Furthermore, what tends to happen is specific deal terms aren’t discussed early on, which ultimately ends up with the deal falling through. At that point, it could be too late to engage old potential buyers as they may have acquired a different website business.

The Apex Brokerage team ensures that all deal terms are discussed and negotiated early on in the acquisition process. Doing so mitigates the possibility of a seller going down the rabbit hole with the wrong buyer. This ultimately saves everyone’s time; the buyer, seller, and broker.

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Are you interested in selling your business? Apex Brokerage offers free valuations here.

Are you looking to acquire a business, but you either don’t have the time or you don’t know what to look for? Apex Brokerage offers buyer representation services, which may be a good fit for you.

Have a general inquiry? Contact us here.

By | 2017-05-11T16:48:07+00:00 May 11th, 2017|Acquisitions|Comments Off on Sales Price Is Only One Facet of an Acquisition