Here is a common problem. An owner tells a business broker: “I am ready to sell.” Maybe they have been talking off and on for six months and the owner has made the decision—or so it sounds. The broker moves forward and creates marketing materials, lets some buyers know and within 48 hours several buyers have expressed interest. It’s important to note here that 90% of the time, those buyers, who showed interest were already out there shopping. That’s why they responded so quickly.
Continuing with the scenario, the broker has everyone sign confidential agreements. This is the norm. Once confidentiality agreements are in place, those buyers will want a little more specific information. Each of them will have their own small details to ask about. One may want to know the square footage of the buildings, another may want to know a sales ratio that the seller does not normally calculate. The third buyer may want to stop by for a quick on-site visit.
The ball is now in the court of the owner. The owner must be ready to respond. It doesn’t matter that he had a vacation planned for the next two weeks. Those buyers will need and more importantly, expect their answers within hours or overnight. Why? Because they are shopping!
Buyers are always on the hunt. When you market your business for sale, if it is what they are looking for, they are already prepared to move quickly to a due diligence phase of the sale. They want information and they want it fast. If you (the owner/seller) are now having some reservations, second thoughts or simply getting cold feet and slow to respond, the result is simple. Buyers don’t wait for you, they move on. Why? Again, they are shopping and the message you are sending through non-responsiveness is: “I’m not serious.”
This may surprise you. You may think that your business is the greatest enterprise ever created and that people will be lined up to buy it once you put it out there. And you may feel pretty good when those first few buyers come around. It is a great feeling. The reality is they will leave just as fast as they came around if you do not respond quickly to their requests for more information.
Further, if you make a habit of this, it will be difficult to sell your business. Your broker will become frustrated and will be reluctant to bring you qualified buyers, knowing that you are not responding in a timely fashion. At the same time, you will become frustrated with your broker, thinking that he is not helping you, when the reality is that you are at the root of the problem. So be ready to respond fast!