Selling your Business to the right buyer is essential. Here is why!
Want to avoid selling your business to Dr. Jekyll? We’re all familiar with the story about Dr. Jekyll and Mr. Hyde, the person with two completely different personalities. Just as there are different types of buyers with varying motivations, there are also buyers with distinct personalities. If you’re planning on buying a business or if you own a business that you want to sell, here are some of Dr. Jekyll’s “traits” that would discourage the other party from revealing too much information about their business.
1. Job Seeker
Try to establish this one early on, as they are a complete time-waster. Asking for a financial statement generally takes care of them. They have no money and no ambition. They don’t like their current job, so if they find the perfect business with zero down payment, they will be made. There are many job seekers out there, so narrow these down early.
2. Investor Using Other People’s Money
The investor is a person who uses other people’s money and presents themselves as a cash buyer or leader of an investment syndicate authorized to purchase a viable business for sale. Once again, they can be a time-waster, so isolate them quickly. The best way to do that is by either requesting a financial statement or requesting a meeting of all parties that are investing in the business. If the investor lives interstate or overseas, you have your answer – would you lend money to a friend or family member to buy a business you will rarely see?
3. Savior
This person typically exhibits a few key traits. Often, they love to talk and have strong opinions, which can lend them credibility, but they present themselves as the person who is going to buy the business, turn it around, and keep the jobs of all the employees. The quickest way to isolate this one is to ask for a financial statement, as chances are they won’t have any money.
4. All Cash
The all-cash buyer is tricky because you so want to believe they are genuine and that your business is the perfect match for them. They know this, which is why they claim to be a cash buyer. However, all they do is waste your time because the cash doesn’t exist. If they had that much cash, they would use it to buy a more expensive business that generates greater cash flow.
One of the all-cash buyer’s tricky behaviors is to convince you that they are genuine and then use the lure of being a cash buyer to reduce your price. It is very easy to flush this buyer out—simply ask for a verification of funds and ensure the proof is an original document, not a photocopy. It is perfectly fine for them to redact the account number or other sensitive information.
5. Obstinate
This one is straightforward to identify: lots of talks, lots of promises, and seemingly the perfect buyer (similar to the all-cash buyer). But the obstinate buyer refuses to sign the confidentiality agreement. The solution to this one is straightforward. Move on and don’t waste any more time with them. If someone refuses to sign a confidentiality agreement, imagine how difficult it will be when you are getting into detailed negotiations.
If it’s time to sell your business, understand what’s involved so you can navigate the process effectively. There are many steps involved in selling a business, and to protect your business asset, ensure you do things correctly. This includes getting the right professional help at the right point in the transaction.
Finding the right business broker in California is a crucial step in selling your business. By understanding the key qualities to look for, knowing where to find potential brokers, and asking the right questions, you can find the perfect partner to guide you through a successful sale.
Ready to take the next step?
Contact Andrew Rogerson today for a free, no-obligation inquiry.
Find the right buyer when selling your bath and installation business in California