Business Broker for Distributors San Diego – Why You Shouldn’t Go the Twitter Way When Selling

Elon Musk’s intent to buy Twitter has been greatly publicized. As the owner of a distribution company planning on selling, you might be wondering if this is the way to go. The answer is a resounding NO. While making the sale of your company public can help attract more buyers, the drawbacks are severe. That is why any business broker for distributors San Diego trusts you speak to will recommend keeping the sale a secret. But why is that the case? To better answer this question, you need to understand the drawbacks of not maintaining confidentiality during the sale of a company.

Loss of Employees

The main drawback of making the sale of your company public is the loss of key professionals from your organization. When there is going to be a change in ownership, employees immediately get nervous about the future of the company. Will the new owner need them around? Will they be okay with the new management? What if the new owner chooses to shut down the distribution company to silence competition? These are all valid questions employees ask. As a result, most of them will start looking for greener pastures. Needless to say, the loss of key employees will disrupt operations. To avoid all this, your business broker for distributors San Diego depends on, will recommend keeping the sale a secret until the last minute.

Impacted Selling Price

The figures you get during a business valuation may vary significantly when you make it public that you are selling. This is because the loss of key employees will impact operations. This will in turn cause the value of your company to go down. In the case of Elon Musk and Twitter, on April 28th, Twitter’s stocks dropped after there were rumors of the purchase deal falling through. This caused the share price to fall to $48.26 all the way from $54.20. While the deal talks are confidential, shareholder pressure is pushing Twitter to sell.

While it is not possible to keep the sale of a publicly traded company a complete secret, what is happening to Twitter due to rumors demonstrates why it is important to keep everything a secret. Making the sale of your company public is not the best way because it causes significant transaction price variation.

Confusion in the workforce

If key employees leave, there will be a management void. This will lead to chaos. Rumors of the sale will also make employees nervous. As a result, this will lead to poor work performance. Consequently, the value of the business will decline due to poor performance.

There are many more problems that can follow including the exit of key customers and suppliers. Working with a business broker for distributors in San Diego to maintain confidentiality throughout the sale is the best way to go.

Business Broker for Distributors San Diego

What Client’s Say

We Couldn’t Be Happier

"When we thought about selling we had no idea what our business was worth or how to go about selling. What you were able to do was to cut through the fog so that we understood the valuation issue and had a comfort level with the process. As you know we ended up selling for somewhat more than the original valuation and we got all cash and our CPA loved the way our tax liability was minimized. We couldn’t be happier!"

Over $250,000 More

"Our first contact with you shocked us when you suggested that we wait 18 months before selling because you believed that if we hit our projections that the value would be significantly greater. As it turned out we not only followed your advice but also got slightly over $250,000 more than we originally had hoped for. It is seldom that we have had the opportunity to deal with a firm that doesn’t want both money and a commitment NOW. It was clear and obvious that you had our best interests at heart."

You Got the Valuation We Agreed On

"You did a great job on the sale of our business in really beating the bushes for buyers, including a UK company that was an active suitor. You managed to get the valuation that we had all agreed upon and got it substantially all in cash and got the transaction closed with little to no problems or expensive lawyers involved."

Thank You for Handling Our Business

"Our business was smaller than what your firm normally handles but it was a BIG part of our net worth and savings. Thank you for handling our business and we were very pleased and delighted with the results."

More Than Anticipated

"Our transaction was involved as we had different corporate entities located in different states. Our only regret is that we didn’t retain your services before 2012 when we paid $25,000 to a firm in Texas that did a valuation and market analysis for us before then failing to do anything in the way of trying to sell our business. You got it sold for more than anticipated."

Loss of Employees

Impacted Selling Price

Confusion in the workforce

The Sales Process