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How to Sell a Business: The Offer
Qualifying the Buyer
Further qualifying the buyer before negotiating or accepting an offer
At this stage, it makes sense to further qualify the buyer before spending your time negotiating an offer. Don’t waste your time negotiating with a buyer that is not qualified.
You may tactfully ask the buyer to provide you the following:
- Personal Financial Statement
- Buyer’s Disclosure Statement
- Buyer Profile and Questionnaire
You can either ask the buyer for this information before you begin preparing the offer, or you can stipulate in the offer/purchase agreement that the buyer will provide this information within five business days of acceptance (or any other time period you specify). This effectively makes the due diligence mutual, which allows you to cancel the offer if you do not approve the buyer. This is a very important strategy and can potentially save you a lot of stress and wasted time.