We always hope that a business we are selling is going to move very quickly, but some don’t, especially in times like these. As the time that a company is on the market lengthens it is important to be in regular contact with your client and important for the client to say in touch with their advisor in order to make sure nothing in a deal has changed markedly.
We have a business we represent that has been on the market for most of the year. There was quite a bit of activity early and one offer fell through. Interest has picked up again over the last month. We just had a surprise on a call between a prospective buyer and the seller when the seller said that he has to think about whether or not he wants to sell now. We were shocked to hear this.
Over this period, the seller had moved, taking on an additional mortgage, and had a number of other investments (mostly real estate) decline in value. As a result his financial status has changed dramatically, so some of his options are no longer open to him. I think it wasn’t until he got a new offer on his business that it really hit him what all of this meant to him, and he froze. Fortunately in this case, the buyer is very flexible, so there is some hope that we can create a structure that will work for the seller, but a lot of deals would have caved in at that point.
I felt badly that I hadn’t checked in with him on the impact of his changing situation. He too shares some responsibility to keep us apprised of changes that might affect our work. As always, it’s hard to over communicate.