In this article we will take a look at 3 situations to be aware of when selling your business. Selling your business is normally quite an involved process. It takes months to complete a deal. Sellers usually experience a variety of ups and downs during that time. This is true even in the case of successful deals. That is why it is important to keep your eyes open during the process. This will allow you to assess your potential buyers.
Let’s take a look at these 3 situations to be aware of when selling your business. These are various aspects of the sales transaction that could be concerning and could mean that a deal is less likely to be successful. You should identify these types of situations so that you will be better prepared to notice them if they were to occur. You do not want to waste your time dealing with a prospective buyer that is not a good candidate for buying your business.
Signs of Lack of Interest
There are many instances when prospective buyers have approached sellers, but the parties controlling the purchase are never involved. If a company expresses interest in your business, but the President or CEO seems to be too busy to talk to you, it more than likely means that there is something off about the situation. If communication starts to dissolve during the process, it could also mean that your buyer is not truly interested.
Inexperienced Buyers
If an individual buyer says that he or she is interested in buying your business, but has no experience in your industry and no history of owning a business in the past, this can be a red flag. Even if the buyer has serious intentions, he or she may become nervous and start to feel overwhelmed as things progress with your deal. When you are being approached to potential buyers, it is a good idea to not get too engrossed in buyers that do not appear to be completely legitimate.
Withholding Information
There are situations where caution should be warranted in the later stages of a deal. For example, sellers have not been allowed to see the buyer’s financial statements. This could mean that the buyer does not have the resources actually necessary to proceed with the transaction.
These are 3 situations to be aware of when selling your business. Working with an M&A advisor can protect you from buyers that are not the right fit. Having a third party involved when challenges do occur can go a long way in effectively getting things back on track.