You will find many articles and opinions online about the rights and wrongs when selling your business. Clearly, there are many important decisions a business owner must take when looking to exit, these include: legal, accounting and tax considerations, preparing for the sale, your business value and deal aspirations and how you might find the right buyer, to name but a few.
Any business exit is firstly a sales and marketing process. A key principle of any sale process is to understand and create a buyer qualification procedure fit for purpose. A process that will help you determine whether any potential acquirer is a good fit or not for your business. Does the buyer tick all the key boxes of a genuine and motivated buyer? If not, move on!
Buyers come in all shapes and sizes, not all will be right or appropriate for your business. Your qualification process must be able to identify low scoring buyers so you can avoid spending valuable time and resources with a buyer who simply will never be able to secure the purchase of your business. You only need one buyer, qualify out the weak and focus on the prime targets.
I believe a high proportion of failed deals could have been avoided if the seller or their adviser had set up a stronger buyer qualification process. Just because a buyer has shown interest in a business and has the cash does not automatically make them a good or the right buyer.
Any basic qualification criteria should include:
Are you dealing with the ultimate decision maker?
Why are they interested in your business, is there a strategic angle or business opportunity?
How will they pay for your business, if they require funding, is the lender the ultimate decision maker?
What is their acquisition window, and do they have the resources to meet those timescales?
Have they completed a previous acquisition, and do they have an experienced team behind them?
Is there a good reason or compelling opportunity to acquire your business? If not, be concerned.
Does the buyer have to work to any strict rules or policies that might kill the deal?
It will seem obvious on reflection, but sellers and their agents can get quickly excited at the first sign of an offer, but this is the point where you raise the game and qualify hard. There are no quick fixes or short cuts if you want to do the job properly and secure a successful business sale.
The harsh reality is that many business owners (including their advisers) do not understand or embrace the full power of buyer qualification when selling or advising their client. For those that do not know, or the ones that choose to ignore this key sales tool, can only keep their fingers crossed and hope that luck alone will land the right buyer. Others follow a proven process that saves time, money and greatly increases the chance of a successful business sale.
At Vexus we have a thorough and effective buyer qualification process in place to help you find the best buyer and successfully sell your business. Talk to our team of business sale experts today at firstname.lastname@example.org