We are receiving unsolicited offers to buy us out, but we are not fully ready. How do I calculate the flow cost of waiting versus selling now?

Question

Tyler Smith · Accepted Answer

Receiving an unsolicited offer is flattering, but it rarely yields the best valuation. To make a logical decision, you must evaluate the strategic option of waiting versus selling immediately. This requires understanding your flow cost of waiting.

Your flow cost includes the ongoing overhead, stress, capital expenditures, and market risks you bear by keeping the business. On the flip side, waiting allows you to upgrade your operations, implement EOS® more deeply, and build a stronger leadership team, which can significantly increase your valuation later.

Ask yourself if the potential increase in purchase price in two or three years outweighs the flow costs and risks of operating the business during that time. If you can use that time to transition yourself out of daily operations and clean up your balance sheet, the leap in valuation multiple will easily justify the wait.

Do not let the fear of missing out drive your decision. If you have a solid business, there will always be buyers. Use a disciplined approach to weigh the immediate cash offer against the projected future value of a fully optimized, self-running company.