In a perfect world, business owners would plan three to five years ahead to sell their companies. But, as one industry expert has suggested, business owners very seldom plan to sell; rather, selling is “event driven.” Partner disputes, divorce, burn-out, health, and new competition are examples of events that can force the sale of a business.

After they have decided to sell, sellers often find the unexpected happens and they are caught off-guard. What follows are a few of the unexpected events that can occur, surprising sellers.

Substantial Time Commitment

Sellers find the time necessary to comply with the requests – of not only the business intermediary but also the potential buyers – can take valuable time away from the actual running of the business. The information necessary to compile the offering memorandum takes time to collect. Many sellers are unaware of the amount of their time necessary to gather all the documents and information required for the offering memorandum, nor of the memorandum’s importance to the selling process.

There is also the time necessary to meet and visit with prospective buyers. A business intermediary professional will play an important role in screening prospects and separating the “prospects from the suspects.”

Handling the Confidentiality Issue

Many company owners are also the founders and creators of their companies. They can have difficulty in delegating and tend to want to make all of the decisions themselves. When it comes time to sell, they want to be involved in everything, again taking time away from running the business. Members of the management team, like the sales manager, have a lot of the information necessary not only for the memorandum, but also on competitive issues, possible acquirers, etc. While easier said than done, the owner must realise the importance of including business managers in the selling process.

Forgetting the Others

Many mid-sized, privately held companies also have minority stockholders or family members who have an interest in the business. The managing owner may be the majority stockholder, but in today’s business world minority stockholders have strong rights. The owner must deal with these people, first in getting an agreement to sell, then convincing them about the price and terms. A “fairness opinion” can help resolve some of the pricing issues. Minority stockholders and family interests have to be dealt with and not overlooked or pushed to the end of the deal. When this happens, many times it is the end of the deal, literally speaking.

The Price is the Price is the Price

All sellers have a price in mind when it comes time to sell their companies. Most businesses go to market with a fairly aggressive price structure. When an offer is presented, it is often significantly lower than the seller anticipated. Sellers are rarely prepared for this – and, obviously, are not very happy about it. Many sellers reject the deal without even looking past the price. But a business intermediary professional can help structure the deal so it can work for both sides.

Not Having Their Own Way

Business owners are used to calling the shots. When an offer is presented, in some cases they still think they can call all the shots. But owners have to understand that selling their company is a “give and take.” They can stand firm on the issues most important to them, but they have to give on others. Also, some owners want their attorneys to make all of the decisions, both legal and business. It is usually in the owner’s best interest to make their own business decisions.

Confidentiality Leaked

There is always a small possibility word will leak out that a business is for sale. It may just be a rumor that gets started or it may be worse – the confidentiality is exposed. Sellers must have a contingency plan in case this happens. A simple explanation that growth capital is being considered or expansion is being explored may quell the rumor.

Keeping Your Eye on the Ball

With all that is involved in marketing a business for sale, the owner must still run the business – now, more than ever. Buyers will be kept up to date on the progress of the business, despite the fact that it is for sale.

Business intermediaries are well-informed when it comes to the surprises that may materialize during the sale of a business and they have expertise in not only anticipating surprises but dealing with them. Intermediaries, like merger and acquisition advisors, can prepare business owners for all possibilities that may occur in the sale process and help sellers navigate a variety of perplexing and stressful issues.