26 Jul Top 5 Deal Killers You Should Avoid Like the Plague
Finalizing a deal can take months. But all that work can go down the drain with just a single misstep. That is why it is critical to proceed in as careful of a manner as possible. In this article we are going to explore the top 5 deal killers that you need to avoid when you buy or sell. Any of these issues can take your deal off the table with shocking speed.
Deal Killer #1-Sellers Trying to Go Too Fast
Sellers need to remember that trying to go too fast too soon can raise a big red flag! When buyers see a seller that is trying to rush through things, it can indicate that there is a serious problem. Being overly eager to sell makes a seller can look desperate and trigger red flags, and that is only the beginning.
An overly eager seller may accidentally give away too much information and potentially jeopardize the sale. So stay calm and patient when selling no matter how difficult that may be.
Deal Killer #2-The Loss of Key Management or Staff Before a Sale Goes Through
Buyers can be quite nervous, and losing key management and staff just before a deal goes through is another potential red flag. A seller wants the buyer to be 100% confident that the business can operate smoothly without the owner necessarily being onsite all the time.
The loss of key staff or management may indicate institutional instability and/or potential future problems. The last thing a new owner wants is to take over a company that is missing key management and staff.
Deal Killer #3-Problems During Due Diligence
It is vital to make sure that all accounting, banking, clients and other key details are true and accurate. A few simple mistakes could cause an otherwise solid deal to disappear right before your eyes. Don’t wait until the last second to handle due diligence.
Deal Killer #4-Don’t Be Tied to Just One Customer
The old saying, “don’t put all your eggs in one basket,” holds true for customers. A business with a single customer upon which everything depends isn’t a business with a major flaw; after all, if that customer leaves, your deal may very well be in jeopardy. This is why it is critical that you have a wide variety of clients.
Deal Killer #5-Not Choosing a Business Broker When You Buy or Sell
A business broker understands what is involved in a successful transaction. The bottom line is that an experienced broker understands what both a seller and a buyer needs in order for a successful transaction to occur. If you want to avoid a range of potentially costly and painful mistakes, then make sure you have someone knowledgeable backing you up.
There are many ways that a deal can be “killed.” We have outlined the five most common deal killers that you should look for, but remember every situation is different. Again, this is why having an experienced business broker in your corner when you buy or sell is the best route towards making sure things stay on course.
Copyright: Strategic Business Brokers Group