Corporate Acquisitions

How to Get What Your Business Is Worth

Inc. Magazine |

In Brief...

If you have ever promised your child a treat in return for good behavior, you know all about negotiating leverage.. When selling an attractive business, you also have leverage-up to the point that you sign a letter of intent (LOI), which almost always includes a "no shop" clause, forcing you to terminate discussions with other potential buyers while your newfound "fiance" does due diligence before handing over the check.. After you sign the LOI, the balance of power in the negotiation swings heavily in favor of the buyers, who can then take their time investigating your company. Peter Lehrman, the founder and CEO of AxialMarket, an online marketplace serving buyers and sellers of private businesses, describes a situation he witnessed first-hand: Lehrman recommends seven things you can do prior to signing an LOI to minimize the chances of your deal dragging on for months and becoming watered down: Cultivate a group of customers to act as references before you sign the LOI.. Disclose any legal or accounting hiccups before you sign the LOI.

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