3 Steps to Vetting Prospective Business Buyers
Selling your business can be an exciting time. Whether you are looking to retire or just move on to another chapter of your life, even to buy and grow another business, you may be anxious to just finish the deal. However, in that haste, there is a danger that you won’t properly vet prospective buyers, and that can waste a lot of your time.
The thing is, you don’t want to get your hopes up for no reason, and there are a lot of serial “want-trepenuers” out there who want to own a business, but never will. How do you tell? Here are three simple steps for vetting prospective buyers when selling your business.
Are You Ready?
This is a key question and involves a couple of other ones as well. Does the potential buyer have a specific business or business type in mind? Namely, yours? Do they have a definite timeline? How long have they been looking?
If they have been looking for a while or have only a vague idea of what kind of business they want, you may be able to easily cross them off your list. If there is not a timeline on their part they may press you for information, but leave you waiting for them to make a decision they are in no hurry to make.
In short, if the buyer is not ready to pull the trigger, and it doesn’t appear they will be ready soon, you can safely move on to another buyer.
Can You do This?
This s a simple, but important question. Your business requires specific skills and expertise to run, and if the buyer does not have them, they may back out at the last minute when they realize they are in over their head.
Ask simple questions like “What kind of business have you owned before?” and “How does that prepare you to do this?” Bottom line is, if they can’t do the things they need to run your business, you can either offer training, add automations to your business to make those skills less essential, or alternatively move on to another buyer.
Even though you are leaving your business, you want it and the new owner to be successful. Don’t set them up for failure.
Can You Show Me the Money?
This may seem like a tricky and somewhat blunt question, but it bears asking. Do they have the money or can they get the funding to buy your business? Some buyers have heard that they can buy a business with little money down and the owner doing the majority of financing, but unless you are desperate as a seller or are willing to take on that risk, it usually does not happen that way.
Ask for proof from their accountant, bank, or other funding source that they have or can access the funding to buy your business, and if they can’t, move on to the next candidate.
Need help finding a buyer? Want someone to handle the process for you? Contact Rogerson Business Servicesto see how we can help you sell your business.