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How to Sell a Business: The Showing
Disclosing the right amount of information
What is the next step after meeting with the buyer? Don't stuff the buyer's head full with too much information. Keep the meeting the right length - you will only know by feel. Keep some things a mystery. Tell them that if they are interested, they can come back for a second time, then you will show them something really interesting about the business.
If they are interested, they may come back for a second meeting. Some buyers make an offer after the first meeting. Some don't. There is no magic formula. THe right number of meetings is probably between 1-4.
When is enough, enough? Is the buyer requesting a 6th or 7th meeting? Don’t waste your time – move on.
When to stop answering questions and giving information – When selling a business you are making certain representations regarding your income, etc. These representations are not verified before an offer is made so there shouldn’t be a need for five or six meetings. The in-depth investigation of your business is made after an offer is accepted and this time period is called “due diligence.” A few meetings should be sufficient with the buyer. It should be enough for them to decide if they want to make an offer and move forward.
Why is my buyer requesting so much information and meetings? Fear – that is the only reason. It is fear of the unknown. They likely have never owned a business before, and may be scared to death. Your job is to make them feel comfortable. If you are financing a portion of the sale, then you can tell the buyer that you wouldn’t finance the sale if you didn’t believe in it. Also, explain to the buyer that if they make an offer they will get plenty of time to do their research (due diligence).
Using assistance intelligently - If you approach the sale of your business intelligently, you can maximize the sale price while minimizing fees. At Morgan & Westfield, we focus on maximizing what you are left with after the sale. We can save you tens of thousands of dollars by advising you on some of the following items:
- Minimizing taxes from the sale of your business
- Structuring seller financing while protecting yourself
- Exploring creative financing strategies
- Gaining maximum exposure for your business
- Assistance with deal structuring
- Purchase agreement preparation and review
- Due diligence guidance
- Assistance with minimizing closing costs and escrow fees
- And dozens of other critical considerations