Sarasota County Business Broker | Florida Management Consultant
When two parties come together to buy and sell a business, they both share responsibility in the transaction. We will focus primarily on the seller, but note some responsibilities of the buyer as well.
Although a seller can place restrictions on the business broker for prospective buyers they want to see, there are limitations both from a legal and practical standpoint. Legally, sellers cannot place restrictions that can be construed as discriminatory. From a practical standpoint, a seller who sets a lot of restrictions can limit their business prospects and make it more difficult to sell.
Those restrictions can also be unrealistic demands about how the buyer will use the business or make changes. Once the business is sold, the buyer has the right to move the business in whichever directions they please. Buyers sensing you aren’t willing to let the business go will look elsewhere, so make very sure you want to sell before you start the process.
Also, you must be prepared to answer questions that you could find intrusive, particularly if you are a sole proprietor and haven’t had to discuss particulars of how your business is run. Once non-disclosures are signed, buyers have the right to ask you specific questions about the business as they determine their interest. These questions might include:
- The history of the business
- Responsibilities of major partners and others
- Decisions they made to grow the business
- Challenges they have faced
- Why are they selling? This can be personal to many sellers, but be prepared for it
- Regulations and licenses that affect the business
- What training will the seller provide the buyer?
- Is there financing available from the seller?
- Specifics about local or regional competition
If you as a business seller understand the buyer needs information to make a major investment in your business, the transaction will be less difficult for both parties.
The buyer has responsibilities too
Buyers are admittedly excited about finding a business they are interested in purchasing, but there are things they can do to prevent turning off the seller. Here are some things business buyers should do to create a positive environment for the purchase:
- Offer to sign a non-disclosure before the seller asks for it. Being proactive is a good sign to a seller that you are looking after their interest as well as yours.
- Don’t waste a seller’s time — do your homework about their business before the first meeting. This shows you are serious about the transaction.
- Be patient and don’t bully the seller for information. Each seller is different and may divulge business information at different times. Don’t rush the process; instead listen carefully and learn.
- Understand that many sellers are stressed by the sales process. The business may have been under their control for many years and they can have a hard time letting go.
Hallmark Business Brokers has a great deal of expertise in linking business sellers with excellent buyers in the greater southwest Florida area. Our goal is to learn about our clients’ needs for selling or buying a business, then stay with them for the transactional process. Each business sale is different and we can help you avoid pitfalls that can derail the sale or cost you extra money. Contact Hallmark Business Brokers today for a consultation.