Recent blog posts elicited some very interesting comments as I have been touching upon the current market to buy a business. Besides the usual concerns expressed by buyers, brokers and sellers about the economy’s overall impact on the business for sale arena, one thing has not changed - only a motivated seller and a serious buyer will get a deal done – good times or bad.
Many business owners dream of the day that they will sell their business and often, they are delusional in thinking somebody will walk through the door with boatloads of cash and make them an offer they cannot refuse.
From a buyer’s perspective, I have always found it effective to ask a seller a simple question: “If your business does not sell what are you going to do?” Obviously, they do not want to play their hand and tell you that they will sell at all costs, but a motivated seller will couch their reply with a telling answer such as being fully committed to sell, they have set plans in place post-sale and that they will make a deal happen with the right buyer.
This does not mean they will give their business away, offer dream terms or accept a grossly reduced price. However, it does convey they are committed to selling and will work with the right buyer.
Far too often the parties involved with a potential business sale think that they have to be overly cagey in their approach and especially on the sell side by adopting a strategy of just doling out enough information to tease a buyer. Or, by using the overused and ill-fated approach of “make an offer and we will get you the information.” That tactic is antiquated and useless in most cases and while its origin is to eliminate the “tire-kickers”, it does not make sense in my opinion, but, it is understandable from a perspective of not wasting time since the goal is always to align a serious buyer and seller and get them to the finish line.
On the flip-side,
When all is said and done however,
Conversely, if they do not respond promptly, even if it is an outright refusal, it is generally a sign that they are really not prepared to engage in the selling process; they are not motivated. As a serious buyer, isolating the truly motivated sellers is fundamental to the business buying process.
Have a wonderful Thanksgiving holiday.
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