No one wants to be messed around, especially not when you’re handling something as important as the sale of your business.
But how do you know you’re selling your company to someone who is legitimately interested in completing the purchase? Get to know these potential red flags so you can spot if someone might be wasting your time.
No Due Diligence
Just like selling a company, buying a company is a big deal. It’s a huge commitment, and it’s a life-changing transaction. So any legitimate buyer is going to take this process very seriously.
If they just come and make an offer straight out the gate, this can be very exciting for you as a seller. But is it too good to be true? If they haven’t done their due diligence and haven’t asked you any key questions about the business, they might be wasting your time.
Stalling Tactics
There are a lot of moving parts and fine details involved when selling a business, and so the buyer needs to be fully engaged in keeping the process moving forward. If they are constantly stalling or just difficult to get hold of, this is a big potential red flag.
Stalling tactics might include things like rescheduling meetings or even no-showing on key meetings. Or it might simply involve not answering the phone or replying to emails with incomplete answers and missing details.
Unclear Finances
This is an extremely high-value transaction. Even small businesses tend to sell for seven-figure sums, or even more. Of course, this means your buyer has to have their finances in order; otherwise, they are not going to be able to uphold their side of the bargain.
If your buyer is not able to commit to specific price ranges or demonstrate that they are able to complete the sale, this is going to be a problem. Similarly, sales that are contingent on other factors — for example, the buyer is waiting on money from another transaction, which is not guaranteed — may also suggest that the buyer will eventually pull out.
No Preparation to Take Over the Business
If the buyer has no experience in running a business and does not have the requisite team in place to help them do this, it’s a big red flag. When you are selling your business, you want to make sure that your organization and your personnel are taken care of. If the buyer is not equipped to take up the mantle as business owner, this is a worry.
There’s also a good chance that the buyer will realize this themselves further down the line. As a result, they’ll pull out of the sale and leave you high and dry.
Enjoy a Stress-Free Business Sale with Batallan Group
Here at The Batallan Group, we have a strong track record in buying organizations from business owners across a range of industries. We offer a more direct route to a sale — one free from time-wasters and procrastinators.