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Running a Business while Waiting for A Buyer Until Closing

Running a Business while Waiting for A Buyer Until Closing

Running a business while waiting for a buyer is sometimes difficult, but it goes without saying,

You want to keep valuation high.

If you have the patience, you can plan in how to boost valuation.

This is where you drive EBITDA up before the sale, and you plan for what is to come next.

In a complicated deal if you carry lots of real estate, you can prepare for 1031 Exchanges, where you have a specified time to locate a property after a real estate sale. You can also plan to structure money in a creative way to provide income as opposed to paying capital gains tax on the sale. You would have to contact a financial, legal, and tax professional to help you with these scenarios.

When selling your business, the most important thing is how do you treat the business while you wait for closing.

The goal is to maintain things.

If you don’t have a deposit in, that can be risky.

But you don’t want to blow the deal. It’s a fine line.

You don’t. want to extract a whole bunch of profit, and deplete the A/R that the buyer was expecting at close.

So you have to understand how to keep things afloat.

If you can drive up business now and collect more until you close, that’s a good way to look at things. You just want to maintain what you promised or negotiate that in the deal if there is no substantial deposit or tight timeline to close, and pin that on the buyer as the risk they are taking. But you have to understand the psyche of the buyer and whether they really long for this business or if it’s just an add-on they don’t necessarily need.

That’s how you approach the maintenance until closing.

On the flip side, if you grow things, often times you’ll want more money. Sometimes you can get it, but if you overreached on the asking price beforehand then you will probably get closer to asking price and it will be quicker to close. If you are knee deep in the deal, you probably won’t get more just because something happened. There is a way to approach things carefully in terms of trying to get more money if the business rapidly improves between LOI acceptance and close.

There are a lot of nuances, which is why you would like an experienced M&A team to help you with negotiating the deal and guidance in maintaining the business while you are closing.

You want to give the buyer a good takeover, but if you can collect more now do that as well while protecting him and his investment.

Please reach out to us if you have any questions relating to acquisitions:

Email – acquisitions@jarbly.com

Phone – (800) 773-1523

Simply engage us below to get started whether it comes to bringing you qualified buyers where we list your business for maximal value or engaging us to bring qualified and vetted businesses that match your exact target criteria such as industry and EBITDA multiple if you are buying a business:

Buyer-Side Engagement – Retain Us to Provide you with Qualified and Vetted Businesses that Match Your Target Criteria

Seller-Side Engagement – Retain Us to List Your Business and Bring Legitimate Buyers to the Table

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