I was recently asked what impact being a woman-owned business enterprise (WBE) might have on the business- sale process. Like most similar questions, there is not really a simple answer to this question.The important thing to remember is what a business buyer will be interested in when buying your business. In most cases, it comes down to two basic questions:
Will the buyer be able to retain the business’s customer base?
and
Will the buyer be able to retain the employees of he business?
If the business’s status as a Woman Business Enterprise raises a question about the buyer’s ability to retain the business’s customers, it may be a very significant factor in the business sale process. Typically, the woman-owned business scenario is most significant with federal, state and local government entities which may have targets for contracting with woman owned businesses. There are also large corporations that have similar targets.
.A change in ownership status might give rise to a governmental entity rebidding an opportunity. It might also make it less likely that the business will be able to retain the business through the next regular contracting cycle. A potential business buyer will be very interested in understanding the business implications of acquiring a woman owned business.
In some cases, the percentage of a business’s customers who are impacted by ths status is relatively small. In those cases, a buyer might conclude acquiring the business might not result in a significant risk of client losses. In other cases, the business’s status as woman owned may have been a major source of client opportunities. A change in ownership status might put the customer base at significant risk.
A potential buyer will be very interested in understanding what the facts are in a specific acquisition opportunity.