The process of selling a business is, in many cases, a life changing event for the owners. Many consider the business their “baby.” As such, there is a great deal of emotion involved in the process of selling a business.
It is not unusual for the owners to become very emotionally charged in attempting to decide how best to achieve an exit strategy and again once the initial letter of intent (LOI) is received. Given that the decision to sell the business has already been very emotional for the owners, adding an offer that the owners may feel is insulting only compounds the emotional aspect of this deal-making process. Therefore, a seasoned transaction advisor will help the business owner understand the price and terms relative to the negotiating strategy of the acquirer. It is unlikely, after all, that the terms and conditions set forth in the initial LOI represent the absolute best offer of the acquirer.
Given that the business broker is emotionally removed from the process, he can provide objective advice to the business owner and prevent emotions from running high on both sides. Owners handling negotiations themselves are subject to emotional biases during the process that could damage the professional goodwill with the prospective buyer. The business broker removes this risk and conveys offers and counteroffers to the parties. Removing this emotional aspect helps facilitate the process and may lead to maximizing the transaction price for the sellers.