Strategies to Qualify a Business Buyer
No matter how successful your small business is, finding the right buyer can be challenging. This is mainly because of a number of factors. For example, most buyers out there investigate different businesses as a hobby. This makes it difficult for sellers to qualify potential business purchasers who are really interested in purchasing their company. The asking price, the type of business you are selling, and the goals you are trying to achieve also have a substantial impact on closing a deal successfully.
Strategies that you can use to qualify a buyer
Experience in the Same Industry
First, you should ask potential buyers about their experience in the type of business you are selling. It is important to dwell deeper on this subject. You should tell the buyer that you want specific information about their experience running a business in the same industry. You should be able to research to see if potential buyers are telling you the truth about their experience. This will help you determine if the buyer is genuine or a time-waster.
Buyer’s Financial Information
The second important thing that you should check in a buyer is their financial profile. There are some critical questions that you should ask them:
Do they have enough liquid cash on hand today?
Can they afford your business?
Are they planning to apply for a business purchase loan?
These questions will give you a clear idea of the type of buyer you are dealing with. If a buyer can’t afford your company, there is no point in giving them the name and address of your business.
Proof of Funds
Don’t forget to ask the buyer for proof of funds before providing them with any private information on your business. A genuine buyer will not hesitate to show you proof of funds. Fake buyers or those who are dreamers will fight you on this. This information will help you know if the buyer can pay the down payment.
Non-Disclosure Agreement
After you are satisfied, the buyer is genuine, and if s/he wants to see your company, you should get them to sign a non-disclosure agreement. This agreement will protect your business. This agreement does not allow buyers to spread the word about your business that is on sale. This way, you can show your business to potential buyers and still keep this news confidential. If your employees, vendors, and competitors find out that you are selling your company, you will not be able to run it successfully.
Bear in mind that you need to provide potential buyers with enough information about your business to get their attention. It is also essential to know if the buyer you are dealing with is an actual buyer or a time-waster. It is highly recommended that you hire a qualified and well-recognized business broker to handle these things for you. Professional business brokers can quickly identify a genuine buyer because they deal with many buyers on a day-to-day basis.
