Six alert signs to watch out before buying a business:
While you may be planning to buy a business, don’t forget to check for these ‘six alert signs’ that could make or break your deal.
WATCH OUT FOR THE FOLLOWING ALERT SIGNS IN THE SELLER:
- Lack of commitment: In some instances, the seller doesn't have a valid reason for entering into the sale process. Without a strong reason for selling, he or she has neither the willingness to negotiate nor the flexibility to see the sale to a conclusion.
- Just testing waters: Such sellers are not at that "hungry" stage that provides the push toward a successful transaction. These sellers merely want to see if anyone wants to buy their business at the price they would like to receive.
- Unrealistic price expectation: Many sellers are unrealistic about the price they want for their business. They may be sincere about wanting to sell, but they are unable to be realistic about their business valuations in the marketplace. The demand for their business may not be there.
- Dishonesty: Some sellers fail to be honest about their business or its situation. They may be hiding the true reason for selling business; some might not even disclose that there are more than one owner and not all are in agreement to sell a business.
- Last minute changers: A seller may decide to wait until a buyer is found and then check with their outside advisors about the tax and/or legal consequences. At this point, the terms of the deal have to be altered, and the buyer won't agree. Nobody likes changes--especially buyers!
- Refusal for Seller Financing: Many sellers don't understand that lot of businesses are seller-financed. Buyers have to be able to make the payments while still making a living from the business. If the seller is hesitant to undertake this risk, how can he expect the buyer to put faith in buying the business? If the seller has a genuine reason to refusing for seller-financing, show him some easy financing options with PowerPay’s Pay Link program.
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