15 May Finding Waldo – How to choose the right buyer for your business in a crowd
Tomato. Tomato. At first glance it looks a lot alike and not much importance is given to differentiate the two. But they are not the same. One is simply, wrong. All the same, you must be cautious when categorizing your potential buyers. You may very well find yourself with various candidates which at plain sight may seem to fit your forecast for the outcome of your sale. Nonetheless, the more you know what you expect from the sale of your business, the clearer it’ll become who is the perfect candidate for the negotiation of your transaction.
Always remember that the most crucial piece to your puzzle that is your deal, is inevitably who you choose as your broker, for he / she will be the bridge that unites both sides – you as the seller and your buyer. Make sure your bridge is built on experience, confidence and professionalism, as there is no room for error at such a decisive point in your life. Having a skilled broker can add an abundance of profit to your bank account and additional benefits as well.
Why is it important to meet and screen your prospective buyers? Finding potential buyers is a job in itself, and your broker should be able to provide you with excellent candidates. Yet, there’s plenty of work and homework to be done once you are presented with the opportunity of a buyer. How serious are they? Are they financially solid, can they provide enough economic statements to ensure the success of the sale in its entirety? What’s their intentions? Are they strategically purchasing to merge or eventually morph into something else? Or are they making simply a calculated financial move which will multiply their profitability over the years to come? It will be a good business move on your part to dig into the buyer’s own business practices. Are their employee’s long term? Have they made successful acquisitions in the past? A trail of success on their resume will always guarantee an effortless and rewarding outcome for you and your transaction.
Make you and your buyer’s transaction smoother and simpler by knowing beforehand what it is that you foresee happening before and after the sale is completed. Will you want to remain part of the business as a partner or even an employee? Will you be selling the business as a whole or keep some assets for yourself? Will there be an overlapping time between the change of command where you will still be involved to ease your employee’s transition? Waiting until the last minute to take these expectations under consideration can only jeopardize the length of the transaction at hand. You can simplify the deal by being prepared on what you are forecasting your outcome to be.
It is not all about a good price. A good offer may sound tempting and appetizing at first, but you must be ready to deal with the possibility of that offer beginning to downsize once your buyer starts digging deeply into your business and may start finding reasons to drive the offer price down. Also, take into consideration all debt owed, taxes, fees and commissions that must be paid out from the offered price. Make sure that after is all said and done, you are ready to move on and you are free and clear of any pending dues.