Assess the seriousness of approach
It is important to distinguish between a random mailshot and a serious approach. There has been an increase in random mail shots over recent years and owners should, quite rightly, be cautious.
Tailored approaches from professional advisers should be taken seriously but only if they are indeed tailored and the identity of the potential buyer is established early on in the process.
Private equity has generally been increasing deal origination activities over recent years and, with significant funds available, those approaches should be taken seriously.
A tailored approach from a strategic buyer could be ideal and should not be discounted, however, it is important to hold back commercially sensitive information until there is more evidence of their intention.
Take your time
An unsolicited offer might be exciting and intriguing but take your time before taking any steps – avoid a knee-jerk reaction.
For example, immediately telling family and colleagues might be premature without thinking through the impact which is likely to be de-stabilising and introduce uncertainty.
Let the potential curiosity wear off before sharing the news or replying to the buyer. Have a plan in mind before responding.
Do not divulge too much information too soon
Any response to an unsolicited approach will often result in a request for information from you. It can be very damaging if commercially sensitive information is released too early in the process.
An unsolicited offer might be exciting and intriguing but take your time
Learn about the process and potential pitfalls so you are better informed. There is no such thing as a standard offer and the devil is in the detail, which you need to review carefully with your advisers.
Research the potential buyer and understand their objectives and commercial rationale.
You should be alive to the potential impact this process will have on your business – the trading performance of businesses will often drop during a sale process, exactly the trading period which comes under a disproportionate amount of scrutiny during due diligence.
In short, do not react too quickly, be clear on your objectives and strategy, assess the seriousness of the approach, do not divulge information too early, understand the process options to sell your business and get specialist advice.