A business might be sellable, but not ready for sale.  Often businesses are put on the market when they are not ready.  Either the business is listed for a price well below the real potential value of the business resulting in loss of huge amounts of unrealized value for the shareholders, or it is priced for its potential, but buyers generally will not pay a premium for potential, so the business sits unsold.

The best time to sell is always when you don’t have to. Selling when you don’t have to, provides you the luxury of picking the right buyer and offer; and gives you an advantage during the negotiating process. We recommend that business owners have a clear and realistic horizon for the sale of their business.  Planning for the sale should start 3-5 years before the actual target date to ensure that the business is ready for sale and that any eventual sale yield a premium price and terms.

In the mergers and acquisition arena, we are more concerned about perceived risk as opposed to actual risk.  Risk perception is the subjective judgment a person or organisation makes about the probability of a risk occurring and its potential impact on the individual or organisation, and this will vary depending on the situation, timing, and experience and background of the perceiver.

1 Entrepreneurial Buyers:
Typically an individual or small group of business people who are looking to purchase and run their own business.  Their funding comes typically from real estate equity and cash they have accumulated through their efforts (employment or other business ventures).  They often don’t have specific experience in the industry or market of the target company, but have the entrepreneurial drive to learn and be successfully.