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Listening Can Pay Dividends

John Kielich, CPA - Managing Director for Kolb+Co. M&A Advisers   email | bio 
LeAnne Foster, CPA - Senior Associatefor Kolb+Co. M&A Advisers   email
March 2011

Business owners are often approached about selling their company by interested parties through letters, emails and phone calls.  Too often these overtures are not taken seriously and ultimately ignored.  While many of these inquiries are nothing more than "fishing trips," some are legitimate inquiries.  Your investment to determine the legitimacy of the opportunity is simply some time to listen.  Conversely, taking the risk of ignoring the opportunity may be extremely costly.  The following describes a situation where the owner would have been well rewarded for their time:

A business professional approached a company he had an established relationship with to have a conversation about why it was a great time to sell their business to an interested party.  The business owner would not take the time to consider this idea simply because long ago he had decided to wait until a specific calendar year.  Unfortunately, the economy took a nose dive (which the business professional sensed might happen).  When the business owner finally decided to sell a year later, the "perfect storm" had arrived: the economy tanked, a major customer was lost and vultures were circling.

The good news is the owner ended up selling to the same company who was interested in buying them one year earlier.  However, the price paid for the business was a fire-sale price - not the healthy price the business owner was counting on getting and could have received a year earlier.

The business owner is not someone who sells a company on a daily basis or spends time researching and following different industries and the economic forecasts.  They are busy running their business.  For that reason, they need to rely on others and really listen.

There is nothing wrong with saying "no" to an opportunity after listening.  Keep an open mind, and follow up on the opportunities that come your way.  You never know when stars will align.