A Major Competitor Made an Unsolicited Offer to Acquire my Small Business. What's My Next Step?
A major competitor has made an unsolicited, but generous, offer to buy out your small business. Many businesses would jump at this opportunity during the current economy, but it's important to fortify yourself with timely information about developing market trends, including business valuation and brand valuation information, and make an informed decision - one that ensures the highest results. Read on to learn what your next step should be after receiving an offer to acquire your small business.
During this type of situation, you need information to fuel strategic thinking. Business owners must arm themselves with extensive information about what makes their business valuable, potential exit strategies, other potential buyers and what is happening in the marketplace. This information empowers owners to control their own destiny, whether it means selling to or beating out the competition.
The first step is to accurately determine the value of your business. While the offer may sound significant, the real question is whether or not it is an offer that is truly reflects that value of the business you have built. Many factors make a business unique - contracts, brand value, geography and even barriers to entry can have value! You should seek the opinion from an independent business valuation firm that can help you to recognize the true worth of your business. Be sure to work with a business valuation company that has a great reputation, a deep understanding of your business and extensive past experience within the business valuation industry. Ask a lot of questions before engaging a firm, so that you can feel confident with who you are working with. What is most important is that you obtain an accurate business valuation or brand valuation, as well as trustworthy guidance you can rely on.
Secondly, recognize that change is constant. Maintaining a competitive advantage in today's ultra-competitive, global marketplace requires relentless planning and absolute dedication to creating a culture of continuous improvement. Get timely information and advice on what is happening in the marketplace. Are there impactful developments and developing trends that could change the value of your business in the short- and long-term? You want to be empowered with the best plan and tools to anticipate and adapt regardless of whether or not you decide to proceed with a sale.
Finally, understand what motivates buyers to pay more for assets so that you can maximize the sale. You should have a strategy that includes identifying valuable intellectual property; leveraging production and systems information; optimizing inventory mix, balance and turnover; and retaining key personnel. Engage experts early on to discuss options and develop an intelligent plan so that you can yield the highest result.
About the Author
http://www.accuval.net/ is a global business valuation and consulting firm that helps companies "up" their success, providing a broad range of business valuation and asset management solutions, including brand valuation, purchase price allocation, asset impairment studies, 409a/ASC 718-505 (formerly FAS 123R) equity valuations, and intellectual property valuations that empower companies to confidently make strategic business decisions.
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