The story often goes like this: a business owner with no intention of selling their business in the foreseeable future gets approached by a competitor who is interested in acquiring their business. Or maybe you are a business owner who is thinking of selling your business, but haven't taken any formal actions to do so yet. In any case, if you’re prepared, the process from here becomes straight forward. If you’re not prepared, your next move could hamper your business’ future performance and rob you of a great opportunity. Here are five ways that will ensure you best manage such scenarios and even use them to your advantage:

#1 Have an Understanding of Your Business’ Fair Market Value

Having a firm understanding of your business’ fair market value puts you in a great position to evaluate any proposals received from interested parties. Some buyers may be seeking to acquire your business in hope of securing strategic advantages (like lower price competition). In such cases, they may be willing to offer you a higher price than fair market value to secure these advantages. When you understand the value of your business, you are in a great position to ensure you secure a good outcome from such approaches — and if the prospective acquirer does not make a reasonable offer you will know when it’s time to walk away from the negotiation table!

#2 Be Conscious of Confidentiality

Too often, in the heat of the moment when speaking with a prospective business buyer who has approached you directly, you may be inclined to divulge certain information about your business’ financial and operating characteristics. Be careful! Many buyers will use this as an opportunity to gain information that could be useful for them in undermining your business’ performance and eroding the goodwill you have worked so hard to build up in your business.

Before releasing any information to prospective acquirers, ensure strict confidentiality terms are put in place. Furthermore, even once confidentiality terms are agreed to, ensure you are still careful with what information you disclose. For example, if you are in discussions with your competitors, be careful when discussing the nature of customer contracts and supplier agreements — divulging too much of this information has a real potential to do long-lasting damage to your business.

#3 Have a Plan for What You Would Like to Do After Selling Your Business

Even if you are not considering selling your business in the foreseeable future, it pays to have an idea of what you would like your life to look like if you didn’t own your business. Further, understand what type of money you would require in order to fund these plans.

For example, if you imagine that your post-business life will involve you retiring, have a clear plan as to what activities you would like to enjoy during your retirement and an understanding as to how much money you will need in order to be comfortable. This will enable you to easily gauge the suitability of any offers received from prospective acquirers.

#4 Remember: You Are in Control

Too often, when business owners receive unsolicited approaches from prospective business buyers, the element of surprise can provide the business buyer with an opportunity to negotiate favorable transaction terms to the detriment of the seller.

It is important to remember that it is completely up to you whether you accept any offers made for your business. On top of this, there is nothing to stop you from taking your business out to the wider market place should you feel the offer made is not in line with market norms.

#5 Seek Advice

Unsolicited approaches from prospective business buyers are often a surprise. On top of this, the potential sale of your business will likely conjure a range of emotions which can be detrimental to sound decision making. Because of these reasons and others, it is vital to seek advice on the best way to manage any unsolicited approaches to buy your business.

Conclusion

Surprises happen throughout your life as a business owner. Don't let a surprise offer to buy your business knock the sense out of you — take the time to evaluate your wants and needs as well as the appropriateness of the offer. Remember: you are the one ultimately in control and if you are unsure of how to proceed, there are many experts at your disposal who are trained for just such evens.