For any business owner in the process of attempting to sell their company, finding a serious buyer who is both qualified and engaged in the situation is vital. There are sadly some prospective buyers out there who either aren't qualified to buy your business or might be engaging with you for certain nefarious purposes, and being able to weed these out from the serious buyers is an important task for saving time and protecting your interests.
At Utah Business Consultants, this is one of several areas our business brokers are happy to assist clients in while we help you sell your business. We have decades of experience in this field, and all the skills you'll need to differentiate the serious buyers from those who you should steer clear of. This two-part blog series will begin by going over some of the positive qualities that often indicate a serious buyer, while part two will focus on the flip side and red flags that should signal a buyer isn't for-real.
Asking the Right Questions
One of the earliest and simplest signs of a serious, dedicated buyer for your business is someone who asks a lot of questions about your business. Obviously, the right questions will vary for most businesses, but what you're looking for is someone who is curious about the inner workings of your company and especially interested in how it all ties into their proposed plans going forward.
Questions that show they actually took some time to research the market and understand the industry, even if it's superficially, are usually positive. A prospective buyer who doesn't follow up on questions you answer with further intelligent questions is a red flag. More knowledgeable buyers will be able to make connections from your information and connect those dots between how what they learn about your company may play into their own business plan going forward.
Evaluating Capital Expenditures
One of the first areas any prospective buyer should show interest in is your company's list of capital expenditures. A business buyer who sets aside investment funds for improvements is generally interested in growing the company and wants to be engaged at a more engaged level than someone who prefers to see their business stay status quo or even slowly decline.
Wages and Salaries
Any possible buyer for your business should also want to know about your company's wages and salaries. While some buyers want to cut these costs, especially in highly competitive markets where labor costs are skyrocketing, others are interested in investing those funds into better equipment or even outside help that can aid their expansion plans. Again, the right questions here send a positive signal that the buyer is interested in growth and improvement, rather than simply looking for a quick resale by cutting all ties to what they're buying.
A Serious Buyer is Ready to Make an Offer
The most important signal that you're dealing with a serious buyer is when they are prepared to make an offer on the business, especially after proper due diligence has been completed. While some buyers might be prepared to make a bid earlier in the process, others prefer to wait until they know for certain what they're getting into. The important thing here is when a buyer has been doing their research and willing to pay you accordingly for your business, it's usually a signal they are serious about actually buying your company.
For more on how to spot serious business buyers and avoid illegitimate ones, or to learn about any of our business brokers or how we serve clients throughout Utah, speak to the team at Utah Business Consultants today.