How Time Can Kill A Business Sale
Time is not your friend when negotiating with interested buyers. Most buyers are actively looking to invest their money in a business. They have their own timeline in mind and are most likely looking at multiple businesses.
When you have a buyer interested enough in your business to want more information, the best thing you can do is put on your tennis shoes and prepare to be as responsive as possible.
Taking too long to respond to inquiries, or to gather requested information is a red flag for buyers. It can send the signal that you don’t know, or don’t have the information they need to determine if they want to make an offer to buy your business. Being “too busy” to quickly respond to buyers can send the message that your business is overly dependent on you, or it is overwhelming you. Either message is bad for buyers to receive. As the seller, it’s your job to keep the information flowing and make sure a buyer isn’t waiting on you to provide them with information.
Tips for engaging buyers asking for more information:
- Always make sure you have a signed Non-Disclosure Agreement with buyers!
- Make sure you’re clear on what the buyer is requesting, ask clarifying questions if needed.
- Set the expectation of how long it will take you to gather and provide the information, and don’t delay in meeting your promised timeline.
- Don’t overwhelm buyers with information, provide them what they ask for, but no more.
- Not everything asked for should be provided. Without a signed buy/sell agreement it may be too early in the sales process to provide confidential or proprietary information.
It helps to be prepared. Before you put a For Sale sign on your business make the effort to have your business information ready for buyers to examine. By proactively preparing you can readily respond to buyers without delay. Remember, it’s not a one-and-done effort, you’ll need to keep your business information current and organized throughout the time your business is being marketed.
Information buyers are most interested in:
- Financial Statements
- Sales and Marketing Metrics
- Production and Operations Metrics
- Inventory Lists
- Equipment Lists
- Agreements with Vendors, Customers, Employees
Sellers who drag their feet, can’t make decisions on how to respond, or are unresponsive to buyers’ requests, may unwittingly be sending the message they aren’t serious about wanting to sell. Speed is your best friend when working with buyers!