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Buying A Business Is Not Like Playing Poker: You Need To Show Your Cards

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Comments & Replies: 2     Views: 1622     Posted By: Ken Oppeltz  Ken Oppeltz, CBI, CBB: San Diego Business Broker

Buyers, when inquiring about a business, remember that you are asking for confidential information. Even the fact that the business is for sale is confidential and the premature exposure of the sale could damage the business and its owner.

Topics: Buying A Business     Tags: buying a business



Buyers, when inquiring about a business, remember that you are asking for confidential information. Even the fact that the business is for sale is confidential and the premature exposure of the sale could damage the business and its owner. You of course will want to know the name, address, financial performance information, rental rates, etc. This information is not available to the general public, so the seller or their broker will want you to sign a non-disclosure agreement, plus know more about you prior to releasing that information.

Our firm, plus most other professional business brokerage offices, will want to at least have some basic contact information, know a little bit about your background, and have some representation from you that you have the financial capacity to complete the transaction, Most of the time, this need not be you providing your tax returns or bank statements, but rather just a signed buyer profile stating that you have a certain amount of money to work with. This seems like a fair request given the information that will be provided by the seller.

What happens if you fill out the NDA with the address listed as the local UPS Store, no telephone number, and a an email address that looks suspicious. The Seller or the Broker has no way to know who you really are and are very likely to not provide you with the information. Same for the financial representation. A bunch of zeros or N/A's inserted on your Buyer Profile form doesn't exactly provide comfort to the Seller and again, will likely result in no response from the Seller.

Now, I certainly understand a buyer's reluctance to provide their financial information if the advertisement is vague and has no financial information. I too would be irritated if I saw an ad/posting for a "Service Company" asking $500,000, with no revenues or earnings listed, and no other description. Beside the fact that I would never have inquired about such a vague ad/posting to begin with, I certainly wouldn't want to provide detailed information about myself not knowing even the type of business or if its profitable. But if by the ad you can determine its likely a fit, then it's time to "show your cards."


Buyers, as well as sellers, may not know how many inquires a business broker will get on a given business either from email or phone, and the frustration there is when they call and forget to leave their area code on the phone number or just include the email address. Business inquires come so fast some days that a business broker may not have time to research just who left a message and forgot to leave pertinent information. For a buyer to be taken seriously and have their calls or email returned in a timely matter, or at all for that matter, it's important for buyers to fill out all the information completely on the NDA and when leaving phone messages to speak clearly, name the business they are calling about and give the area code for their phone number. Business brokers do receive calls from other brokers and agents who pose as buyers in hopes of soliciting their listings, and so vague information will look suspicious to some business brokers and calls may go unreturned for that matter.


  Helpful Resources To Assist In Selling And Buying California Businesses
Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Ryan Clark, Business Broker, Southern California

The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan at 310-652-8353.

Chuck Post: Laundry Buyer Representation, Consulting, Due Diligence

Chuck Post has 32 years experience in the laundry industry, specializing in assisting laundry buyers (and entrepreneurs) with buying or starting up, building, re-tooling, laundries throughout California. Laundry buyer representation, consulting, due-diligence, lease negotiations, laundry valuations.

William Park, Business Broker - Southern California

Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.


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Buying A Business Is Not Like Playing Poker: You Need To Show Your Cards!

Buyers, when inquiring about a business, remember that you are asking for confidential info. Even the fact that the business is for sale is confidential and the premature exposure of the sale could damage the business and its owner. Ken Oppeltz (San Diego Business Broker) explores this key topic.

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