5 Questions Business Owners Should Be Prepared For From Buyers
How to make the most money from your business sale without dropping the price.
The first is Why Are You Selling?
Buyers will understand if you’re selling your business because of retirement, relocation, divorce, illness in the family or partner disagreement. However, buyers want to know if your business is in decline or facing some sort of problem. Share the truth as to why you are selling your business and a buyer will want to think about its potential.
The second is What Is Unique About this Business?
Buyers will be impressed if your business offers products or services that are different it from its competitors.
The third question is Can the Owner Prove the Financials?
A buyer will ask to see detailed proof that validates the financials you are presenting. Be certain that the revenue and profits that you are stating can be supported. In addition, be prepared for questions regarding the breakdown of cash versus credit card.
The fourth question is What Is the Owner’s Role in the Business?
A business that is easy to transition to another owner or requires little day-to-day involvement by the current owner is highly marketable to buyers. If the owner’s job is highly technical it will vastly shrink the buyer pool.
The fifth question is Can The Business Be Financed?
Good deals get done with seller financing. Very rarely will a buyer offer an all-cash deal and most buyers expect to put down a substantial deposit with the remainder financed. However, acquiring financing from lenders is a challenge. Therefore, the only two options to you, the seller is: lower your asking price or work with the buyer to overcome their financial challenges. Seller financing is becoming more and more popular, as sellers realize it gets them a better price as it dramatically increases the pool of buyers.