Business owners often receive calls from perspective buyers. These first interactions with prospective buyers can be critical to the success of a deal. Not only could you acquire the beginnings of an M&A deal out of the phone call, but this is also an excellent opportunity to learn valuable information about the market.
The first thing to ask the caller is whether they are the actual buyer or an M&A intermediary. If the person that you speak with is an intermediary, it shows good credibility for the buyer that they put forth the extra effort to approach the transaction professionally.
Be sure to indicate that you would like the conversation to remain confidential. Even so, be sure not to disclose any private information about your company until the buyer has signed a non-disclosure agreement.
Ask the buyer how they typically price their acquisitions. Most legitimate buyers will have some sort of formula set up in which they use valuate a business.
Remember to also use this time to ask personal questions about the buyer, their credibility and their intentions. Also ask about the buyer’s background with acquisitions and how they plan on funding the deal. Ask what led them to pursue your business. These preliminary questions will help you determine a legitimate buyer from an illegitimate one. It can also serve as a gauge of your marketability as well as your business value.
If you're uncertain about potential buyers, contact a professional advisor at George & Company to help sort through the list and get your business sold for what it's worth.