When selling a business, perhaps the most important aspect of the process is finding the right buyer. Once you have spoken with a buyer and want to continue to create a deal with them, it is imperative to be sure that they are a legitimate buyer. You do not want to start selling a business to someone that does not actually have the money to pay for it.
Here are some things to look out for when analyzing potential buyers:
Public Availability
If the buyer has public financial records available, or is publically listed as a legitimate company, then they are likely a legitimate buyer. Check their financial records to be sure that they are not deeply in debt. If they are a private company, it may be more difficult to obtain these records, but it doesn’t hurt to ask.
Financing Contingency
Do not sign any contract that allows the buyer financing contingency. If they do not have the funds, then do not give them the chance to back out mid-deal.
Use a Search Engine
Searching online for a buyer can allow you to stumble onto all kinds of valuable information. You can even research the success of past mergers and acquisitions.
The importance of analyzing the legitimacy of a buyer when selling a business cannot be stressed more. Buyers without any real money will waste your time. An M&A intermediary can help you find information on potential buyers. Be sure to have a lawyer review all documents for clarity and accuracy before moving forward. Contact one of our experienced and professional M&A intermediaries today.
