Seller’s Remorse – Hesitations When Receiving a Good Offer

A large number of business sellers experience a period of indecision right after receiving an excellent offer for their businesses. When the dream of selling the business is so close to come through, sellers struggle with their emotions. Their businesses are their babies. Separation is very painful.

How to recognize seller’s remorse?

In most cases, sellers start wondering if the price they are getting is too low. The whole idea of selling the business becomes questionable. Maybe I should hang on to the business for a few additional years. I will make this same money in my business without having to sell it. Some sellers start asking for higher prices than those agreed upon or renegotiate terms and other matters already settled.

What is the effect of the seller’s remorse on deals?

It can be devastating. Buyers get very upset and get a sense that they have wasted a huge amount of time on an impossible deal. The tension between buyers and sellers increase and deals dye in most cases.

How to deal with the seller’s remorse?

From the seller’s perspective:

  1. Sellers must understand their true motives before putting the business in the market. The reason for sale has to be genuinely stated and understood.
  2. Sellers should recognize that they might experience the seller’s remorse at some point when they are close to making a deal. Recognizing it in advance will help to overcome it and all the fear that it entails.
  3. Sellers must be involved in the sale process before receiving any offer. Some spending in business valuation, business brokers’ retainer fees or other costs related to selling the business increase the sellers’ commitment.

From the buyer’s perspective:

  1. In your first interview with the business seller, ask for the reasons for the sale. If the reasons don’t seem to be clear and genuinely stated, walk away from the business.
  2. Test the seller during the negotiation period. Are they constantly coming back to previously negotiated points? If this happen frequently, the seller is probably hesitating about the sale.
  3. Have the seller pay some transaction costs early on in the process. Sellers who refuse to incur any costs before the closing are probably uncertain about selling.

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