The decision to sell your business shouldn’t be taken lightly. Selling a business is a big deal. If you care about the integrity of your business after you leave, you’ll probably spend extra time finding the right potential buyers, even if their offer is lower than others. However, you can’t control what will happen to your business once it’s out of your hands.
Regardless, qualifying potential buyers is a crucial step in selling any business. The qualification process will help you identify people who will run your business well and people who will follow through with the deal.
When selling your business, qualifying buyers can be one of the most challenging components, and that’s why the first thing you want to do is connect with a professional mergers & acquisition team.
Work with a Professional M&A Team
Many components to selling a business exist. When your goal means finding the right buyer, each component needs handled carefully and thoroughly. According to MergersandAcquisitions.net, the process of selling a business requires strategy, strong financial analysis, and skilled deal negotiation.
All of these components will be handled with care when you work with a professional M&A team. Granted, these services are generally reserved for enterprise-level acquisitions, but you’ll benefit from professional broker services no matter the size of your business.
Your Buyer Will Determine Future Business Success
When you’ve spent your time, money, and energy building a successful business, it’s likely a huge part of your life. You may have gotten your family involved in daily operations and it could be something everyone talks about at the dinner table.
If you’re selling a successful business, you’re going to be handing everything over to someone new, including your customers and their care. If you want your buyer to take on your business traditions, that needs to be part of your contract.
Qualifying Questions to Ask Potential Buyers
To qualify your buyers and weed out those who are a mismatch, ask the following questions:
- Have you ever acquired a business before? If they’ve acquired businesses in the past, but those businesses have failed, that’s a red flag.
- How long have you been looking for a business to purchase? The answer to this question will help you disqualify people who are curious, but not serious. Many people will be interested in discussing the idea of buying a business but aren’t anywhere near ready to buy.
- Why do you want to buy my business? A potential buyer’s motives matter. When you want someone who will act in the best interests of your business, you want a buyer who is passionate about your business. If they’re not passionate about the actual business, they’re probably going to be hands-off. This doesn’t usually fare well for customer relations.
- How will you finance your purchase? You might want to only accept cash buyers, or you might be okay with financing the purchase. It’s important to know ahead of time because a cash buyer will make the process much easier, and cash offers can make it worth selling for a lower price.
- How do you plan to maintain the integrity and brand image of my business? This question will give you an idea of how passionate someone is about your business. If they don’t have any clue about how to carry on your legacy, or they don’t seem passionate about maintaining your brand’s standards, it’s probably not a match.
Don’t Hesitate to Disqualify Buyers
Just as you’ll spend time qualifying buyers, don’t hesitate to disqualify buyers as well. In fact, the more buyers you disqualify, the better. You’ll want to disqualify buyers as early as possible so that you don’t waste your time. For instance, get rid of the tire kickers and curious cats first. Trust your instincts. If something feels off about a potential buyer that you can’t identify, follow your intuition. Even if you’re wrong about someone, you’ll eventually find a buyer.
Selling Your Business? Don’t Skip Qualifying Your Buyers
Pre-qualifying your buyers is the single most important thing you can do when selling your business. Don’t skip this important step. Maintain high standards throughout the entire process of selling your business because if you don’t, you can end up selling to the wrong person. For instance, they might back out of the deal or their financing might fall through.
If you’ve never sold a business before, don’t hesitate to contact a professional acquisitions team to help you find and qualify buyers, and complete your deal.