Why You Should Take the First Interested Buyer (But Not the First Offer)

The Deal Board

Andy and Jessica welcome you to another episode of The Deal Board Podcast. Today they are discussing a very controversial topic which is why, when selling your business, you should take the first buyer who inquires but not necessarily the first offer. In their experience, the first buyer is often the right one and they are telling you why. Andy and Jessica share their advice on how to identify motivated buyers and they also give some “cautionary tales” about their experience seeing sellers refusing to engage with certain buyers

Key takeaways:

[1:40] Jessica explains what anchoring is in the selling process.

[2:14] Andy talks about some of the reasons people go through the first buyer.

[4:20] Technology has made things years when is time to find the right buyer.

[5:10] What does a motivated buyer look like?

[8:35] Andy speaks about the moment when a seller realizes he might have gone too low on the price.

[10:10] Andy shares an example of a deal that did not take place in the most dramatic manner.

[14:20] Jessica shares an example of a deal going wrong due to aspects that could not be controlled.

[18:18] Andy shares an example showing the importance of always keeping your goal in mind.

[21:10] Businesses do not always sell.

[24:06] Listing of the week: Steve Merritt (Houston) is selling a bar that opened during COVID, and as a result had no revenue for 6 months in 2020 but ended the year at $2.6 million in revenue, over half a million dollars in EBITDA. Business is selling for 4 times multiple on the EBITDA.

[28:15] Patrick Bombardiere (Colorado) shares some examples of sales that went wrong.

[35:27] Deal of the week: Tony Keane (Houston) sold a franchise operation in the field of tutoring to the K-12 age range. The buyer wanted a semi-absentee type of work, they close the deal on a combination of cash and seller financing, and was sold for $100,000.

[41:30] Robert Radanovich (Central Oregon) talks about a business owner that should have taken the first offer.

[43:07] Listing of the week: Todd Bailey (Wichita) has a great new business in the home health care field, that owned ten almost brand new homes, they have wonderful operation records and procedures in place. Listed at $3.3 million.

[44:16] Julie Smith (Central Oregon) talks about her experience with a business owner that did not take the first offer (and regretted it).

[45:42] Kevin Everts (Syracuse) shares his experience with a buyer that rejected the first offer.

[47:16] Listing of the week: Eric Mendelsohn (New York City) is selling a fabulous Italian restaurant in Connecticut, the best restaurant in town with a huge bar. Price: $1.5 million, sales are about $2.35 million and it is about two times STE. Call Eric at [phone] or email [e-mail].

[48:55] Bob Dunphey (New York City) shares why a lot of times the first offer is the best.

Mentioned in this Episode:

The Deal Board Podcast

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Email Patrick Bombardiere at [e-mail]

Email Tony Keane at [e-mail] or call [phone]

Call Bob Dunphey at [phone] or email [e-mail]

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