There are warning signs that sellers should be aware of when preparing to sell their business. These warnings signs may indicate that a buyer is either not interested in buying your business or not qualified to do so.
One warning sign is lack of experience. Buyer excitement cannot be confused with buyer experience. If a buyer is not knowledgeable about your business, their excitement may fade and be replaces with skepticism as they learn more about the industry and the involvements of the business. The same holds true for inexperienced buyers who have never purchased a business before. First time buyers are unaware that buying a business is a process and takes time. They may lose interest once they get a better idea of what is involved.
Another warning sign is undisclosed finances. The buyer must be open to sharing their financial information and providing access to their financial documents. Without this, a seller has no way of verifying that the buyer is in a position to buy the business.
Lack of certain buyer qualities and behaviors constitute another warning sign. As a business owner looking to sell your business, you do not want to waste time with buyers who do not exhibit high interest or who aren’t a good fit for the business. You also want to make sure that the decision makers on the buying side are involved in the communication about your business. During the time your business is on the market, it is very important time to make sure that you stay focused on your business. Dips in sales or other areas that contribute to the quality of your business can put a potential sale to a qualified buyer at risk. If you have decided to hire one, your business broker will vet buyers and find qualified candidates to buy your business.
As a business owner looking to sell your business on you own, be on high alert for potential warning signs that could negatively impact the process and derail the sale. An experienced business broker will also pick up on these warning signs early on and help keep the process on track for a successful outcome.
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