A business owner I have been talking to had been approached out of the blue by a potential buyer.
This individual seemed credible.
Polished, professional, and full of good reasons for wanting to acquire the business.
They struck up a conversation, exchanged NDAs, and the buyer requested financials.
Eager to explore the opportunity, my client sent them across.
What came back was the “offer”:
“I would value the business at about 3 times profit.”
That was it.
- No structure.
- No timescale.
- No explanation of what profit meant.
- No context at all.
Understandably, the business owner rang me:
“What does this actually mean?
Is he talking about EBITDA? Net profit? My drawings?
Am I being blinded by jargon?”
My answer was simple:
“No, you’re not being blinded by jargon. It’s just not a serious offer.”
The Danger of Informal Approaches
These types of approaches are common. And on the surface, they feel flattering.
A seasoned buyer shows interest. They speak the language. They seem switched on.
It feels like progress.
But more often than not, these are fishing trips, not genuine negotiations.
The buyer’s goal is to create the illusion that a deal is forming. But what they’re really doing is:
- Testing how much you’ll share
- Gauging how ready you are
- Positioning themselves without committing anything
And meanwhile, you’re the one doing all the giving.
The Cost of Being Unprepared
When you’re not properly prepared to engage with potential buyers:
- You don’t know what your business is actually worth
- You can’t assess the credibility or seriousness of an “offer”
- You risk giving up financial and strategic information without any protection
- You may unknowingly weaken your negotiating position before the real deal has even begun.
- You don’t know whether the buyer even has the means to complete the deal
What Should You Do Instead?
If you’re approached by a buyer, especially out of the blue, take a breath.
Do not send financials immediately.
Do not assume an NDA makes everything safe.
Do not treat a vague multiple as a real valuation.
Instead, do this:
Get clear on your business’s true value — not just a multiple
Understand the likely deal structures for your sector
Prepare your business to withstand due diligence
Put someone experienced on your side
Talk to Someone Who Works for You
Not every buyer is a time-waster. But if you want to separate the serious from the curious, and maximise your chances of a successful sale, you need to control the process — not react to it.
đź“© If you’ve had an approach, or think you might, let’s have a conversation before you send a single document.You