Firstly, larger businesses which involve the sale of shares in a limited company are generally marketed as ‘offers invited’. As it sounds offers invited listings are provided without price guidelines or ballpark figures. This allows the seller and buyer to consider all options and come up with an amenable figure for both parties.
Sellers will list their business as such, due to the fact that it can be much more relevant to have meaningful discussions with someone who hasn’t got a preconceived notion of price. It would be fair to say that larger businesses are bought by current trading entities and therefore, to be candid, they will generally tell you what they will pay for the business!
Secondly and often most importantly, the vendor may not have a specific price in mind for the business… it may be that they are just looking for the ‘best price’ that they can achieve at this moment in time. If retirement is looming fast, price may not be a huge consideration, which means a bargain can be scooped up by an intrepid buyer.
An instance recently involved a comment by a so-called ‘serious buyer’ who stated that ‘he wasn’t interested in a particular business if the seller didn’t know what he wanted for it’! Which is rather short sited (to say the least), as surely the business health and profitability should be of chief concern to a buyer.
Mainly though ‘offers invited’ creates a valuable and important atmosphere, which surprisingly, tries to eliminate the wasting of time, both for seller and buyer. As it’s able to combat situations where the buyer does not have enough capital, and/or where the seller is after the sum total of King Midas’ horde for their business.
This is where having a well informed and logical dialogue with the agent (easier at the Business Partnership than some other agencies I’ll admit) should be the most sensible route. As even if there isn’t a specific sale price agreed between the vendor and the agent, we will always have some sort of multiple in mind. At the very least it enables for a constructive dialogue about the business. We all know that sometimes it’s not possible to detail all the information in a business via the information memorandum.
So remember, if it says ‘Offers Invited’ then that is just what it means… make us an offer!