How to navigate a business sale as a buyer and seller

More than 10,300 businesses were sold in the U.S. in 2018 — an increase of 31.5% over the number of businesses sold in 2016, according to the BizBuySell Annual 2018 Insight Report. A stronger economy has resulted in more financially strong businesses, more financing options and more willing buyers and sellers. The silver tsunami of retiring baby boomers also fuels this trend.

Pennsylvania has been one of the more active markets for business sales in the last few years.

Looking forward, business owners are eyeing governmental policies — including international tariffs and their impact on suppliers, distribution and customers, taxes and interest rates — that may impact the health of their businesses.

If you’re considering buying or selling in 2020, here are some things to consider.



  • Think like a buyer.


Many sellers have been reluctant to make changes to the business over the years “because that’s the way we always did things.” Maybe you did not keep any corporate minutes for years, or used an unusual accounting procedure, or kept inventory in an unorthodox way. That was fine for as long as you owned the company, but a buyer does not look at how you ran the business. They view it from their lens — how they will run it. Just as you would clean your home before a potential buyer looks at it, get your business in order before you prepare to sell it.

  • Establish a confidentiality plan.

How critical is confidentiality to you and your business? Determine who will need to know about a sale and when. How will you control information and data from being revealed during due diligence? When will key employees get brought in to work on the transaction? In almost every business purchase, something will leak before closing, so prepare for that. Someone will find out before an official announcement.

  • Establish the make-or-break deal points early in the process.

What would you absolutely not agree to through the selling process? Are there elements of a deal that if not acceptable to the buyer you are willing to walk away? Be firm on those points. Don’t waiver, but don’t add new ones later.


  • Develop a due diligence team and a due diligence checklist at the earliest possible time.

Provide the seller with your checklist. This is your best chance to learn about the prospective company and discover any issues that exist or may arise after you’ve purchased. The seller will likely resist providing lots of due diligence information (“Why do you need that?”), so the earlier your requirements are established, the better the result will be for you.

  • Meet with an adviser team early.

Get your attorney, accountant, insurance adviser and benefits adviser on board for their respective expertise. You will need them all.  (This is important advice for a seller as well.)


  • Always proceed with your next deal in mind.


Unless this is the only acquisition you will ever make, be mindful of your behavior as a buyer. Sellers talk, and they often speak to other sellers to find out how the buyer treated them. Establish that you are fair but firm. You are not a pushover, but you are honorable and your word is good. You do not play games or mislead or misrepresent to get a deal. Many of the sellers I have represented tell me they “checked out the buyer” with others to see what that were like as a buyer and an owner. Reputation matters.

Ronald Hershner is a business and employment lawyer at Stock and Leader, Attorneys at Law. To contact him or learn more about navigating business sales, visit StockandLeader.com.

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