August 2020

THE WAVE OF OWNERSHIP CHANGE
Series for Business Owners

Out of Sight - Not Out of Mind

Some years ago, on my last run of the day, I tackled a hill at Lake Louise beyond my alpine skiing ability - happens occasionally. Upon checking my handheld at the bottom, I saw confirmation we had come to terms with a buyer on the sale of a client's business. It struck me as a little odd at the time that no meeting had taken place. More the norm today.

Face to face meetings have value particularly as it relates to establishing a level of trust and confidence with a prospective buyer. For years, I would never open discussions with a potential buyer I had not met. Facial expressions are often a much better barometer than actual words.

Meetings are now openly discouraged and with good reason. Talk is cheap in this business. With fewer meetings, business owners are well advised to take additional steps to screen buyers:

  1. Be selective on determining the short list of prospective buyers based on the industry fit with the business being sold and their financial means and resources. Valuations are higher with industry buyers - all the more reason to screen carefully.

  2. Research both the companies and individuals before finalizing the short list. Linked In profiles are all well and good but external references are better. As a mentor of mine once commented about resumes 'Who writes a bad one?'

  3. Carefully stage the information being released - top line financials and general information first with more confidential information as discussions progress. Even with non-disclosure agreements in place, business owners need to retain the right to the information they choose to disclose and when they choose to disclose it.

Selling a business is about more than tough negotiations and agreeing in value. The sooner the seller and the potential buyer become comfortable working with each other, the higher the chances of successful closure.


Rincroft facilitates the divestiture of medium sized businesses. Our clients are companies which are well established and profitable. Since its inception, our company has completed the sale of more than 50 business across a wide range of industries. We also provide advisory services assisting owners in building sustainable value even if they have no immediate plans to sell.

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