We get this question all the time. “Are they serious? Are they going to buy? Are you sure it’s going to go through?” The truth is, we are not fortune tellers. We can vet buyers, make sure they have the funds to purchase your business, ask for a substantial deposit, and ask the appropriate questions to see if they are qualified to run the business, but at the end of the day, we can’t guarantee 100% that any buyer is going to complete the transaction. With that being said, there are several things that you can do to help push the transaction to the closing table and seal the deal.
Keep your business at peak operations.
When a business goes up for sale, it is often because the business owner has had enough and just wants to be done with it. That can also mean that they are no longer trying very hard to keep the business successful. Even though it is tough and can be very draining, it’s important to keep your business healthy and sustaining it’s profitability. If you had $300,000 in sales last year, and then you gave up this year and it dropped to $100,000, people aren’t going to ignore that when they are doing their due diligence. When they are expecting to see $300,000 in sales and during their research they see that it is substantially less, they are going to want to revalue the business accordingly, and it’s not going to be to your benefit. So even though it may be difficult, you have to make yourself keep going and see it through!
Make sure your documents are accurate.
The last thing you want is to find a qualified buyer, get a good offer, and then when they start going through your books, nothing matches up. Even if it is an issue with simple mistakes or things that got missed, it is not going to look good to a buyer and will definitely throw up some red flags. Buying a business can be an extremely stressful time, and they are going to be looking for any reason to cancel the deal. Don’t give them one.
If you have a serious buyer who is ready to move, you need to respond right away. I don’t care if you are on vacation, out of town for work, or just don’t feel like talking to anybody. Pick up the phone! Many people are egotistical enough to think that if somebody is serious, they will have no problem waiting a week for a response. WRONG. If somebody is interested in your business, and you aren’t professional enough to respond promptly, they are going to assume that the rest of your business is run the same way. (Which it probably is.) In the age of technology, most people have their emails going directly to their cell phones, which makes it even more obvious that a lack of response is just somebody ignoring you. You won’t look like a serious seller or a professional business owner. Don’t be that person.
Keep it clean.
Just because you are selling your business doesn’t mean that you don’t have to take care of it any more. Many people have the attitude of ‘Well I’m selling it anyway, why should I put any more money into it?’ Because you want to sell it, that’s why. When a buyer makes an offer, they are excited about the business. They like what you have, they can see the potential, they can see themselves in your position. You need to do your part to keep that excitement going. If they come into your business for their first day of due diligence and it’s dirty, disorganized, and run down looking, they are not going to stay excited. Chances are, they will feel like they missed something when they originally looked at the business, and they are going to start doubting the whole transaction, which leads to looking for ways to get out. Do everything that you can to keep them excited about the business that they are purchasing and you are halfway home.
Help to meet contingencies.
Every buyer is going to have some sort of contingencies, whether it be signing a new lease or sitting in at the business to verify sales. While it may be more work on your part, do everything you can to help speed that process along. If they need a new lease, help with contacting the landlord and facilitating the introduction. If they need to verify sales, find a way to help them do that and make it as comfortable as possible. The faster that a buyer is willing to sign off on the contingencies, the faster you can close and the fewer excuses they will have to get out of purchasing the business.
While there is never a 100% guarantee that a sale is going to go through, if you follow these steps you are well on your way to the closing table. If a buyer has made an offer, they want to buy your business. If it was represented properly and you do everything you can to help keep them comfortable and excited, your chances are very good that it will close.