It is of paramount importance to put yourself in the other person’s shoes when dealing with prospective buyers. Thinking like a prospective buyer could be the difference between selling your business or not selling your business. It is important to continue to put yourself in your buyer’s shoes during the entire sales process. Issues can come up at a moment’s notice.
The “Little Things” Could End Up Quite Big
Financial statements are considerably important. Often you will see contingencies regarding financial statements and/or business tax returns. Be ready and be organized. Another common category for contingencies is lease issues. Falling under the lease issue umbrella are topics such as whether or not the seller has agreed to stay on, or issues regarding the property or needs associated with the property if it is a rental. Other common contingencies can include issues arising from equipment and fixtures that are being included with the sale. These are areas that could be easy to overlook, but can disrupt the workings of a deal. The so-called “little things” can cause a deal to fall apart.
Key Steps for Preventing Contingencies
Step One – Create a Comprehensive List
Make a list of all furniture as well as fixtures, equipment or any other items that could be included with the sale. Remove any item that is not included in the sale. If an item is inoperable then repair it ahead of time. Or at the bare minimum, you could make a list of items that are currently inoperable and include those items in your list. You don’t want a last-minute surprise or misunderstanding to jeopardize your sale.
Step Two – Check Your Leases
It is very important to take time to look at things like your leases. Make sure that there are no issues that could be viewed as problematic. It is in the best interest of the deal that you disclose information on any issues at the start of the deal. You don’t want to waste anyone’s time, including your own.
Step Three – Predict Questions and Have Answers Ready
The time you invest in predicting potential questions and having the answers to those questions ready is time very well spent. You’ll look prepared and that helps build trust.
Be ready to answer questions such as, are you going to stay on with the business for a given period of time? What employees will be staying on? Are there legal issues that should be considered? Being able to answer these kinds of questions is a prudent step.
Considering the needs of your prospective buyer will help you make a sale. In selling a business, there is no replacement for being organized and prepared.