Media mogul Kerry Packer was reported to have said “You only ever get one Alan Bond in your life, and I’ve had mind.” For those unfamiliar with that deal: Alan Bond, a 1980s business tycoon from the wild west (WA), approached Kerry Packer out of the blue with an offer to buy his media business for a price that was more than double what Kerry considered the value of it to be.

If an ‘Alan Bond’ arrived at your offices with a fat chequebook, with a willingness to pay you a handsome price for your business, would you be ready to do a deal? Do you know what your business is worth, and why? Do you also know what it is worth to different classes parties who could be interested in your business, and why so?

If you accepted an offer subject to due diligence, which is very likely to be required, would the prospective buyer be impressed with what it found, drop their price or walk away? Plenty walk away and ever more lower their bid prices.  Don’t forfeit what could be the opportunity of your life.

If you are not ready when you get an approach or when the event is put on you, you’ll either miss out on the opportunity or suffer an opportunity cost. If not ready, the interested party could either walk away or pay a lot less than it could otherwise have paid.

Consider whether your business is ready for an approach. Do you know what such a party would be looking for in your business, and what it would be concerned about? Different classes of buyers look for and are concerned about different things.

If you don’t get the assistance of party with expertise in this area, you may well not know what you don’t know as regards what value various classes of buyers may see in your business and what you need to do to justify their paying a lot more than they may otherwise pay.

Ultimately the question for you would be: Does the potential benefit of engaging an expert justify the cost of doing so?  Another blog on R&M’s website discusses this question – https://www.rogersmorris.com.au/value-creation-what-to-pay-for-it/

R&M’s advisory business helps business owners increase the value of their businesses, and get ready for a merger, exit or investor event. If that might be of interest to you, R&M will be pleased to hear from you. Please email your interest to enquiries@rogersmorris.com.au.