When selling a business, most sellers lose potential buyers in the due diligence phase. This is the phase where you give the buyer time to dig through your business to make sure you did not misrepresent anything. To increase your chances of surviving this phase, you should retain the services of a business broker 92158 trusts. A business broker that has sold businesses that are similar to yours will be able to anticipate the actions of potential buyers and help you prepare sufficiently for the due diligence phase.
Most professional buyers will have a checklist of questions. Some of the questions will include:
- When will the lease expire and what are the lease terms?
- Are your products, processes and ideas protected by trademark or patent?
- Do you have signed contracts with consistent employees and customers?
- Which technologies do you use?
- What are the terms of existing credit agreements?
- Does your business have pending litigations?
- Are all your licenses and other paperwork in order?
These are just some of the questions professional acquirers will want to be answered before they can commit to buying your business. You should also note that acquirers will want to get a more subjective sense of your company. Doing this requires the buyer to do investigative work. Your business broker 92158 can help prepare for the following tricks.
Juggling calendars
It is not uncommon for a professional buyer to want to change the agreed meeting time. The purpose of this is to see how involved you are with serving your customers. If you cannot accommodate the new change, the buyer will probe to know why and then try to determine which part of your business is dependent on you.
Check if the business is vision impaired
You need to be sufficiently prepared to answer all questions about the vision of your company. You should also note that the buyer may also ask the same vision question to your key managers or employees. If the answers are inconsistent, the acquirer may take that as a red flag. Make sure your team understands your vision before you get your business listed.
Asking clients why they work with you
Acquirers may want to speak to your customers. When this happens, the acquirer will expect you to provide the names and contacts of the most loyal and passionate clients. They will expect to hear great things. The acquirer may ask the customer why they do business with you. The objective is to identify where the loyalties of clients lie. If the client describes how they love your company, that will be good. If their response is about how much they love you personally, that will be bad.
The above are the key tricks used by professional acquirers to learn more about your company. Be prepared. An experienced business broker in San Diego helps you prepare sufficiently so that there will be no surprises during the due diligence phase.