- July 8, 2013
- Posted by: Paul Foster
- Category: Grow a Business, Managing business expenses, Selling a business
Here’s a sad story about trying to get more money when the end resulted in far less money:
A business was owned by two friends. The relationship soured and as a business advisor, I was attempting to facilitate an agreement for one partner to stay and the other to exit. The most probable buyer offered over half a million dollars. The other partner wanted $75,000 more than the offer. I suggested to the seller to consider taking the cash offer on the table and take control of the money. I suggested he could take this money and invest it somewhere else to get the extra $75,000 a lot sooner than ending up in court with a fight. They decided to fight and the lawyers took a few hundred thousand. The sale process took two stressful years and the seller received a lot less!
It’s important to remember, ‘A bird in hand is better than two in the bush.’
If you are contemplating a sale and the offer is solid but the cash is a little short, consider the following factors before saying no:
1) You don’t control the purchaser’s thinking. It is hard to change another person’s mind.
2) How much is your time worth? How much more work would be required to complete a transaction somewhere else?
3) Consider the costs and benefits of keeping the item.
4) Can you take the cash offered into your own control and make up the difference somewhere else?
If you don’t take a breath and realistically consider the above factors, you may think you are taking too little money and therefore declining the offer. While this may be true, if you calculate the above factors together with the certainty of a firm sale, you might really be getting more by saying yes.