The Hidden Risks of Choosing the “Perfect” Buyer

Hidden risks

The Hidden Risks of Choosing the “Perfect” Buyer

When a business owner decides to sell their company, they often have little idea what lies ahead. Most small and mid-sized business owners have never sold a business before, so the process is unfamiliar and, at times, overwhelming.

Naturally, sellers imagine an ideal outcome:

  • A quick transaction (even though most deals take 6–12 months—my fastest closed in three months)
  • Minimal exposure to employees and customers
  • A short list of buyers to protect confidentiality
  • A premium valuation with attractive terms, such as all cash at closing

While this vision is understandable, the reality of selling a business—especially in the M&A market—rarely unfolds that way.

Hand-Picking a Buyer: The Pros and Cons

Some sellers want to hand-pick their buyer. While this approach can make sense in limited situations, I often encourage owners to consider a broader, structured process instead.

The Upside of Approaching One Buyer at a Time

  • Reduced market exposure, helping protect confidentiality
  • Lower risk of employees, customers, or vendors learning the business is for sale
  • Greater control over your legacy and successor—the buyer may retain the company name, culture, and team
  • Perceived potential for a faster sale (although, in practice, it usually isn’t)

The Downside: Loss of Leverage

The biggest drawback to hand-picking a buyer is the loss of leverage, which is critical in any M&A transaction.

Even if you try to imply exclusivity is temporary, experienced buyers can quickly tell when they are the only option. Once a buyer knows they’re the “only game in town,” they control the negotiation. That often results in lower valuation, weaker terms, or both.

I’ve also found that many hand-picked buyers haven’t seriously considered acquiring your business. They may be flattered by the outreach—especially competitors—and engage out of curiosity. Once they review your financials and hear the asking price (which you must disclose when dealing with one buyer), they may walk away.

That’s when sellers often feel blindsided. The buyer you believed was “perfect” suddenly isn’t buying—and you’re back at square one, having lost valuable time and momentum.

In some cases, sellers who insist on hand-picking buyers aren’t fully committed to selling. Consciously or not, this approach can be a way to ease into the idea of an exit while avoiding the realities of the market.

Selling Through a Well-Executed M&A Process

A professionally run M&A process uses confidential marketing to attract multiple qualified buyers, including:

  • Financial buyers
  • Strategic buyers
  • Individual owner-operators

This approach puts you, the seller, in the driver’s seat. You control timelines, manage confidentiality, and set deadlines for indications of interest and offers. Buyers know they are competing—which strengthens price and terms.

If a buyer under contract fails to close, a well-run process provides a bench of vetted, interested buyers you can quickly re-engage, rather than starting over.

Benefits of a Structured Process

  • Stronger leverage through competitive tension
  • More accurate market valuation
  • Better deal terms, not just higher price
  • Greater certainty of closing

Potential Downsides

  • Increased exposure to buyers (which must be carefully managed)
  • A longer timeline—typically six months or more

However, when confidentiality is handled properly, the benefits usually far outweigh the risks.

Final Thoughts

When the time comes to sell your business, there are multiple paths forward. Two common options are:

  1. Hand-picking a buyer
  2. Engaging in a structured M&A process with an experienced advisor

Selling a business typically takes 6–12 months, and nearly 90% of prospective buyers never complete a transaction. A disciplined, well-executed process keeps you in control and significantly improves your chances of achieving the best price and terms—without unnecessary heartbreak.