The Hidden Pitfalls Business Owners Should Know
When it comes time to sell your business, one of the first decisions you will face is how to go about it. If a buyer approaches you, does it make sense to negotiate with that single party? Or should you run a structured auction process, connect with multiple buyers, and ultimately test the broader market?
At Chinook Capital Advisors, we receive this question frequently from business owners and their trusted advisors. While communicating with only one buyer might seem simple or quick, it often comes with hidden pitfalls that could leave value on the table—or jeopardize the deal entirely.
Let’s break it down.
Pitfall #1: You Won’t Know What the Market Would Have Paid
When communicating and signing an offer with only one buyer, there is no way of understanding if other investors would be interested – or what they would pay for your business. Auction processes invite multiple bidders and create competitive tension. That competition often results in higher valuations and more favorable deal terms for the seller.
Without multiple offers, it is impossible to know whether you are leaving significant money—or better terms—on the table. A recent auction we ran yielded 12 Indications of Interest and value range from the lowest to highest was over double.
Pitfall #2: No Leverage
In a single-buyer scenario, that investor has all the leverage and no incentive to move quickly through a process. They might renegotiate the price after financial due diligence, change key terms, or delay the timeline. And since you’re already committed, your negotiating power is limited.
Selling to one buyer may seem faster, but it’s not uncommon for these deals to drag on for months—only to unravel at the end. If that happens, you’re back to square one, with lost time and fewer options.
A structured auction maintains momentum and keeps buyers accountable. They know they’re not the only option—and that urgency often leads to a smoother process. One-buyer deals may feel more private or manageable—but they lack the structure and rigor of a competitive process. Auctions are designed with clear steps, deadlines, and expectations—helping you stay in control, even when the process gets complex.
Pitfall #3: You Might Sacrifice the Best Outcome
At the end of the day, the goal of selling your business is to secure the best possible deal—for you, your legacy, and your team. A controlled auction doesn’t just maximize price; it helps align deal terms with your long-term goals.
That might include rollover equity, employee continuity, or a specific post-sale role for you as the founder.
How Chinook Capital Advisors Can Help
At Chinook, we work closely with founders and business owners to understand your priorities, then design a process tailored to meet them. Whether that’s a quiet, curated group of buyers or a full-scale auction, we build a strategy that:
- Protects your time and legacy
- Positions your business for maximum value
- Maintains flexibility and control throughout the journey
Are you planning a 3-5 year exit? Let’s have a confidential conversation about our pre-transaction strategic assessment process – highlighted in this article.
Thinking about a sale in the next 12–24 months? Let’s talk through your current valuation and transaction options. A conversation today can make all the difference in the outcome tomorrow.
Reach out to our Co-Founders – Ed or John – for a confidential conversation.
