Every day I speak to business brokers, business owner/sellers and I hear some pretty amazing stories about potential buyers of small businesses. I tend to ask them what buyer traits do you listen for to see of a potential buyer is serious? What traits or buyer actions are "deal killers"?
Comments & Feedback From Pro Intermediaries & Pro Advisors On BizBen:
If buyers want to be taken seriously, they have to act professionally. And the person who knows how the buyer should act is the business broker. For most buyers, this will be the first and only business they will ever acquire, and for a smaller number, it may be one of a few acquisitions they will make. But, the broker deals with scores of sales a year, and hundreds, perhaps thousands, in a career. Yet, so many prospective buyers know it all, to their detriment.
The listing broker will expect the following from the prospective buyer: a fully-completed and signed NDA, a detailed financial profile, and a summary of educational and experiential background. Why? Because the seller expects that information before expending hours of time and disclosing highly-sensitive confidential information to a total stranger.
In addition, the buyer should be prepared to discuss with the broker their goals and expectations for a business in terms of time, income, and life-style, preferences for the type of industry and the location, whether they prefer business-to-consumer or business-to-business, 9-5 M-F or 24/7, bricks-and-mortar or service or virtual, retail or distribution or manufacturing, franchise or non-franchise, etc., etc. The broker isn't going to waste his time and energy or the seller's time and energy with a prospect who hasn't invested their time and energy in considering and answering these questions.
Furthermore, I have encountered too many "serious buyers" who have never been an entrepreneur, but somehow believe they know all about buying and managing a business. And, I have seen many such "serious buyers" waste their own time and that of brokers and sellers and I've seen them miss some great opportunities because they won't acknowledge that they have a lot to learn.
Again, if buyers would recognize that the business broker particularly the business broker who has owned and operated his own businesses can be a priceless resource for them, they would be far more successful in their business search, business acquisition, and business management.
So, the most successful buyers are the ones who say:
I don't know show me, teach me, advise me.
How much of a down payment should I typically need?
What financing options are there from sellers, the SBA, financial institutions?"
What professionals should I have working with me in my search, during due diligence, in the transition of ownership?
"What parameters should I be setting for the search?
What are your suggestions for matching my abilities, finances, lifestyle, and goals with compatible businesses?"