Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

January 11, 2016

An Unsolicited Offer – What NOT to Do

By Joseph Eneldas


It takes planning to successfully sell a business, and one of the most “unplanned” events is an unsolicited offer.

“As a matter of fact, we often experience business owners requiring our services due to an unexpected offer,” says Achim Neumann, President, A Neumann & Associates, LLC, a New Jersey based M&A and business brokerage firm. “The most immediate question for the business owner is, ‘what do I do next?’” But as is the case in an orderly planned transfer, there are also some “basic rules” in dealing with unsolicited offers.

Firstly, there is no reason to rush, regardless of what the investor expresses. “The offer is only good until Friday” or “The buyer is looking at other businesses” are indeed simply pressure tactics to entice the business owner into a hasty, not-well-thought-out decision.  Businesses are usually not sold overnight, and the mere presence of pressure should alert an owner: Slow things down!

Secondly, without a proper business valuation in place, an owner simply cannot move forward. This is an indisputable fact, and a delay for a business valuation will certainly be accepted by any honest investor. It is truly not possible to negotiate a transaction value, deal structure, and owner transition compensation package without a credible business valuation. Therefore, the first order of business needs to be to put an objective, third party, accredited business valuation into place.

“For every hundred buyer inquiries, only two thirds of the buyers qualify,” says Frank Arcoleo, Managing Director Central Pennsylvania and Central New York, “thus, it is very important to make sure that the interested party indeed has the funds to buy, and experience to run, a business.”  Suggesting such a qualification process typically puts the business owner in an awkward spot, but a qualified M&A advisor is in a considerably better position to request such buyer information prior to revealing any confidential information about the business.

Another important part of the pre-qualification process is to execute a non-disclosure agreement. The mere knowledge that a business owner is open to negotiate a sale would cause significant problems for the business if leaked into the marketplace.

An old mantra in the M&A business is the expression “One buyer is NO buyer”: basically, the first buyer is most likely not the one who will ultimately purchase the business.  Thus, once a business valuation has been put into place, there is an opportunity to contact other buyers, again preferably by way of an M&A advisor to maintain confidentiality. Thus, the initial LOI – most likely containing a “no-shop” provision – should under no circumstance be immediately accepted and signed.

In sum, a reasonable, seasoned business investor fully understands the due diligence a business seller needs to go through before accepting an offer, especially if the primary business owner also has a responsibility towards other shareholders. As a result, no seller will agree to sign “on the spot,” and it’s only the unsophisticated buyer, attempting to rush a business owner into a deal, who tries to pressure a seller into an immediate acceptance.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

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Client Testimonials

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

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Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs
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If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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