If you’ve built a successful company, it’s not a matter of if, but when you receive an unsolicited offer to buy your business. That sudden phone call or email can be flattering, a validation of the years you’ve invested. It feels like a shortcut to an exit, a direct path to the finish line. However, responding to these offers without a clear strategy is one of the most significant risks a business owner can take. Professional buyers and private equity firms make these approaches for a reason: they know they are more likely to secure a favorable deal when they negotiate one-on-one with an unprepared seller.
This guide will help you understand how to handle these surprise inquiries strategically. We will explore common pitfalls owners encounter, frameworks for evaluating the opportunity, and the crucial first step to take to regain control of the situation.
Three Common Traps Owners Fall Into
The excitement of an unexpected offer can cloud judgment, leading to critical errors. Being aware of these common traps is the first line of defense.
1. Treating It as a One-Time Event, Not a Process
Most owners view a surprise offer as a unique, singular opportunity and abandon the structured approach necessary for a successful sale. The reality is that how to sell a business is a disciplined process, not a lottery ticket. Letting flattery and excitement pull you into an unstructured negotiation immediately puts you at a disadvantage. The buyer is prepared; you are not. This imbalance of preparation is precisely what the buyer is counting on.
2. Assuming the Offer Price is Fair
An unsolicited offer is often designed to sound impressive to prevent you from seeking competing bids. However, without a formal marketing process, you can never know your company’s true worth. There’s an industry adage: “One buyer is no buyer”. The only way to discover the market value of your business is to create a competitive environment where multiple qualified buyers can submit offers. Relying on a single, unsolicited bid almost guarantees you will leave money on the table.
3. Succumbing to Pressure for Speed
These offers frequently come with subtle (or overt) pressure to “move quickly”. This tactic is intended to keep you off-balance and prevent you from seeking expert advice or exploring other options. If your business isn’t ready for the rigors of due diligence, you risk stumbling through the process, losing negotiation leverage, and ultimately accepting a deal you may later regret. Rushing also increases the risk of inadvertently sharing sensitive information, such as customer lists or pricing margins, with a potential competitor.
How to Evaluate the Opportunity
Once you’ve sidestepped the initial traps, you need a clear method to assess the offer. These two frameworks help bring objectivity to an emotional situation.
The Market Test Lens
The most important question is: Has this offer been tested against the open market? If the answer is no, you must treat it as a preliminary data point, not a final number. An unsolicited offer is a starting point for a conversation, not the end of one. Your company’s true value can only be revealed through the competitive tension created by a well-managed sale process. Engaging professional business valuation services is a critical step in understanding your company’s standalone value before you even consider what a strategic buyer might pay.
The “Deal Fit Framework”
Beyond the price, you must assess whether the buyer and the proposed deal are right for you and your company. Use a simple two-question filter to evaluate any off-market offer:
- Strategic Fit: Does this potential acquirer truly understand your industry, your company culture, and the unique value you have created? A buyer who lacks strategic understanding may disrupt the business, harm your legacy, or fail to realize the potential you’ve built.
- Structural Fit: Does the proposed deal structure align with your personal and financial goals? This includes evaluating the mix of cash at close, equity rollover, seller financing, earnout, and employment contracts. A high offer price with an unfavorable structure may not be the best deal for you.
If the answer to either of these questions is “no,” it is a strong signal that you must slow down and explore all your options.
Regain Control with One Decisive Action
Receiving an unsolicited offer can make you feel like you are no longer in the driver’s seat. The most important action you can take is to regain control of the process. Do not react impulsively. Thank the inquirer for their interest, state that the business is not for sale, and ask them to send their information for a potential future discussion.
This simple step buys you invaluable time. It allows you to think, assess your goals, and assemble a team of experts. You only sell your business once, while professional buyers acquire companies for a living. You need a professional M&A Advisor on your side to level the playing field. An advisor does more than just find buyers; they manage the entire process, from valuation and marketing to negotiation and closing, ensuring you are protected and that your outcome is maximized.
The team at Marsh Creek Advisors specializes in managing the complexities of a business sale. Contact Marsh Creek Advisors today to start a confidential conversation about your goals.
