I speak with many (over 80 daily on the phone) business owners/sellers, business brokers, and agents about deals they are doing and the complications that can arise when
selling a small business. What most people don't realize is that over 50% of all deals fall out after they enter into an LOI or purchase agreement to buy or sell a business.
Reason vary - for instance a current BizBen advertiser, Robert (a business owner) who is selling a couple of
Sears retail stores in the
Central coast area has been in escrow 3 times with buyers who have backed out due to 'the current housing situation" and other financing problems. Even though he has gotten a tremendous response on the
BizBen Fast Track advertising program - he has taken back-up buyers knowing that deals can "fall out" at any time. He tells me he is currently in escrow again and things look good, but until a deal is done and the final check in escrow is cut - keep on taking names!
To Avoid Your Deal From Falling Out Make Sure You:
1. When
selling a business keep taking names/back up offers of interested parties until the deal closes.
2. Make sure the buyers you are dealing with have been pre-qualified by
quality contacts at SBA lending institutions if there is possible financing in the picture.
3. Keep marketing/advertising the business heavily (utilize the
BizBen Fast Track advertising for maximum exposure) until it sells - do not believe you have a buyer and then "stop taking calls and names".
4. Make sure your business for sale ad and profile you have written up is complete, honest, and varifiable so when buyers go into escrow and do their due diligence the deal doesn't fall apart because you didn't do your part in preparing the business and documents before you went on the market.
5. Have your advisers - CPA, attorney,
SBA lender, and other
resources ready to go at any time when you go into contract and the due diligence begins!
Do you have a recent experience of a deal falling out?
Share your comments and tell us why your past deals have fallen out!
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