I have a constant flow of buyer leads for business opportunities. But not all Buyers qualify. The first item of business is to have all of my potential buyers sign a Confidentiality and Non-Disclosure Letter. At the same time, I ask the Buyers to provide a copy of a Bank Statement or some proof of liquid assets.
I have found that if a buyer has no liquid assets, or assets that can be converted to liquidity, the chances of moving forward to assist that buyer is slim to none. There are other methods of bringing the buyer funds to purchase, these include: Family, Friends and of course outside investors. I have had a parent provide funds to purchase for their offspring. In those situations, I ask the parent to sign the purchase agreement for the business as means to provide them a position of control.
Money is key to buying a business, having enough to purchase the business is not enough to fulfill opportunity to succeed. The Buyer should have savings for what the business produces in gross sales in 6 months. This will allow the buyer to meet expenses for payroll, taxes, inventory, Cost of goods, insurance and rent should the business have a slowing sales cycle due to any economic fluctuations.
“Show me the Money! Is my basis for bringing a qualified Buyer to the negotiation table with my seller.
I have had times where a buyer would ask if they could have a Seller Carry back financing on a purchase. This is almost never an issue if the Buyer has the financial capability to keep the business operating and has enough money to put down usually 50 to 70% of the selling price. It comes down to building a trust relationship between the Seller and the Buyer.
So if you’re interested in selling your business and looking to have an experienced Business Broker bring you a qualified Buyer. Call me anytime!