How to Evaluate a Buyer for Your Small Business
Selling your business should be approached with the same attention to detail as when you start a business. There is nothing worse than wasting weeks of time on a deal that won’t actually go through because the buyer is not serious or does not have the cash to buy out your business. Spend some time to get to know in order to avoid nasty surprises. If you have all your buyers sign a confidentiality agreement before you share proprietary financial information. This is a standard, so if a buyer balks, it’s a red flag.
Get full contact information. It seems basic, but make sure you have a full name and all contact information for all parties.
Get basic history. Know where they have worked and/or what businesses they have owned. Act like you are interviewing them for a job.
Where do their funds come from? This can be an awkward question to ask, but you need to know how much they have and where it comes from.
What are their immediate financial needs for your business? Do they have a minimum monthly income requirement, and doe your business currently meet it?
What is their timeframe? Buyers who are not serious will not be able to answer this question in concrete terms.
Ask why they want to buy your particular business. If you are uncomfortable with what they have to say, you may not want to go any further.
Ge the counsel of a Creative Business Lawyer to ensure that the process goes smoothly and your interests are properly protected.
While being a successful business owner, you don’t want to get caught up in all of this legal mumbo-jumbo! Lucky for you, we have created something called the Access Plan, which helps business owners protect their legacy. We can schedule a free Shatterproof Session to get you jumpstarted!