When decide to sell a business, you also have to continue running it. The last thing you want to have to do is to entertain buyers who are not serious or qualified. Your time is valuable, and so are the private details about your business. Imagine divulging a whole bunch of sensitive information about your company to someone who ended up being nothing more than a tire-kicker. When you are entertaining potential buyers, get to know them, and understand their true intentions before giving them too much of your time.
Questions Legitimate Buyers May Ask
Buyers who are genuinely interested in your business will ask the right questions. They will be interested in not only your business, but the industry as well, and seek to understand more. Their questions will tend not to be shallow and be more focused on your company’s strengths and weaknesses, as well as its future.
Serious buyers will ask questions about your inventory and cash flow as well as detailed documentation to back it up. They will also want to know more about your employees, specifically their skills, experience and salaries. If a buyer is serious they will show concern for keeping the staff intact after the sale so they don’t have to go on a hiring spree. Expect detailed questions about any potential lease agreements, or real estate that the business depends on.
You can also expect serious buyers to ask about capital expenditures. They will want to know the condition and value of all integral equipment and machinery. They will also inquire about inventory and the condition of the facilities. If you have any debts or legal issues, they will want to know about those. Their goal is to discover any potential headaches or additional expenses that could come after the sale, and be prepared for them.
Put Yourself in the Buyer’s Shoes
A good way to identify someone who is serious about buying your business is to put yourself in the buyer’s shoes. If you were purchasing a business, what questions would you ask? Take time to consider what would be important to you if you were making that kind of investment. If a buyer is only asking shallow, general questions about the business they’re probably not that serious. Legitimate buyers will have a long list of inquiries because they are trying to see the investment through to the end.
Protecting Information About Your Business
Sometimes, serious buyers may start out by asking broad questions about the business before they get into the fine details. Before you share any sensitive details about your company, make sure your buyer signs a Non-Disclosure Agreement (NDA) and that they are financially qualified. If they do not satisfy both of those conditions, they are either not legitimately interested, or are looking to take advantage of your business.
Competition should be your biggest concern when handling inquiries about your business. Some competitors could very well be potential buyers, but often they are just prying, to see what they can learn about your company. They could also leak information about the sale to customers, suppliers or employees, which could give them all doubt about the future of your business. Competitors could also be looking to gain access to trade secrets or sensitive data that could give them an advantage.
Why You Shouldn’t Sell Your Business Alone
In the midst of trying to differentiate serious buyers from casual inquires and protect valuable information about your business, you also have to continue to run it. This can be a very difficult juggling act, that will no doubt divide your time and impair your ability to do either task well. This is where the services of a business broker can come in handy.
A broker will handle inquiries, determine who is seriously considering making the investment, and ensure they are financially qualified. They have the experience to know when to divulge sensitive information, and to whom. Brokers are also experts in confidential marketing, so they can list your business for sale without the knowledge of anyone who doesn’t need to know. Meanwhile, you can focus on running your business optimally and making sure it is ready to be sold.
Do you own a business in Southwest Florida that you are ready to sell? Corporate Investment Business Brokers (CIBB), has been helping business owners in Sarasota, Fort Myers and Naples sell companies of all sizes since 1986. CIBB are experts at confidential marketing and do the work of vetting and qualifying all buyers. Contact us for a free, no-obligation consultation and business valuation and discover how we can help you.
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