Avoiding Tire Kickers

How long does a buyer stay in the market and keep looking for a business before they decide to either pull the trigger or give up their search – or, to use a technical phrase, “fish or cut bait”? 

What affects how long an individual stays in the market? Is there a difference between first-time buyers and previous business owners? How long is too long to be looking? How can you assess a buyer’s motivation level? How do you avoid tire-kickers?

If you’re selling your business, recognizing these different types of buyers – including their motivations and perspectives – will help you understand the reasons behind their behaviors. This knowledge can help you assess if a buyer is serious and likely to make a move, or if they’re merely fishing. 


Let’s first address companies. Once a company decides to grow through acquisitions as opposed to growing organically, they generally stay in the market indefinitely or until they change their strategy. Companies are less likely than individuals to be kicking tires.

Financial Buyers

Private equity groups (PEGs) and other financial buyers continually buy companies as part of their fund-management process, but this varies based on the current age of their fund. Most private equity groups have multiple funds in different stages of their lifecycle and are constantly searching for acquisitions.


Now, on to individual buyers. 

The time span that individual buyers stay in the market varies widely based on several factors. Many business owners are often unaware of just how long individuals stay in the market looking for a business. Some individual buyers remain in the market for years. 

Let’s examine the factors involved.

Motivation Level

Buyers’ motivations vary. Some are highly motivated, set a goal, and buy a business as quickly as possible. Others impulsively decide they want to buy a business after a bad day at work and change their minds the next week. These buyers enter and exit the market frequently. 

First-Time vs. Previous Business Owners

Buyers who have previously owned a business are accustomed to making decisions with less-than-perfect information. They’re more likely to make an offer on a business than a buyer who hasn’t owned a business before. Previous owners are also aware that there is no perfect business – after all, they wouldn’t have sold their own business if it was “perfect.” 

Employees, on the other hand, often don’t understand what it means to be a business owner. They may not be accustomed to making decisions based on limited information or a gut feeling. These potential buyers are more risk-averse by definition – because they‘re currently employees. They’re less likely to make an offer on a business than a buyer who has previously owned a business.

I estimate that less than 5% of individuals looking to buy a business will ever buy a business.

Lure of the American Dream

Everyone wants to own a business. Ask the average American on the street what their dream is, and most will say their dream is to become an entrepreneur. American culture celebrates self-made entrepreneurs, praising them in newspapers, magazine articles, movies, social media, and online. 

Elon Musk, Bill Gates, Mark Zuckerberg, Richard Branson, Larry Page, Henry Ford, Thomas Edison, Andrew Carnegie, Jeff Bezos, Sam Walton – nearly every American can name the companies these people created.

Douglas McMillon, Rex Tillerson, John Hammergren, Stephen Hemsley, Larry Merlo, Mary Barra – do you recognize any names on this list? It’s unlikely. They have each been a CEO of a Fortune 500 company, yet few Americans have heard of them. Why? Entrepreneurs are idolized, while CEOs are often disregarded.

Still, the “American Dream” is to own a business, not land the perfect dream job. As a result, a lot of people are looking to buy a business. Unfortunately, the majority will never pull the trigger – that’s why it’s called the American “Dream” and not the American “Reality.” I estimate that less than 5% of individuals looking to buy a business will ever buy a business.


Many buyers are unrealistic regarding how much cash is required to buy a business, and most are undercapitalized. As a result, buyers often stay in the market for a long time because they don’t have enough liquid cash to buy a business. These undercapitalized buyers may make offers on businesses that are contingent on bank financing, although most of these deals are turned down by the banks, often months later.

Deals Gone Wrong

Then there are situations when a deal goes wrong. A buyer makes an offer on a business and a seller accepts. The buyer then invests several months of time negotiating the deal and performing due diligence, only for the transaction to fall apart for any number of reasons. Many of these buyers will re-enter the market later. 

Beware of Buyers Who Have Been Looking Too Long

Beware of buyers who stay in the market too long. Buyers generally stay in the market for an extended time due to one of two reasons:

  • Searching for the Perfect Business: Many buyers are searching for a business without flaws. Obviously, no such business exists. If it did, it wouldn’t be for sale, or a friend or competitor would quickly purchase it.
  • Aversion to Risk: Many buyers are scared to take the leap. Buying a business requires confronting one’s fears. At some point, the trigger must be pulled. Unfortunately, the prospect of cutting a check for millions of dollars is a proposition that’s just too scary for many first-time buyers. 
A motivated buyer will eagerly jump through hoops.

Practical Applications 

Once you understand the type of buyer you’re dealing with and their behaviors and expectations, it’s time to dig deeper. Just as the buyer will perform due diligence on you and your business, it’s critical that you perform due diligence on the buyer. 

Understanding more about your buyer will allow you to sort the wheat from the chaff, thereby spending more time on serious buyers, and less on the dreamers. Let’s look at some practical applications for assessing buyers. 


A key part of your initial due diligence should be to assess the buyer’s motivations. How motivated do they appear to be? Do they quickly return your calls and emails? Are they eager to move forward, or do they appear to be overly critical of your business? 

I see many buyers who are overly critical, often bordering on being cynical, which may make them feel intellectually superior to you. They may take pride in criticizing your business. They can be critical because they don’t have serious intentions of buying a business.

Have you ever taken a car for a test drive, attended an open house, or gone “window shopping” for an expensive item that was for sale, knowing you had no intentions of buying it? If so, you likely came across as either disengaged, overly critical, or cynical to the salesperson. You may have critiqued the quality of the ride on the test drive, or commented on how the spare bedroom was not big enough. You probably didn’t exhibit genuine signs of interest. People looking to buy a business give off equally clear signals of their intent.

What’s the most accurate way to assess a buyer’s motivation level? A motivated buyer will eagerly jump through hoops. They will quickly return phone calls and emails. Despite any potential roadblocks, they will appear keen to move forward. You don’t have to chase motivated buyers down – instead, they chase you down.

In 1964, Justice Potter Stewart was asked to define hard-core pornography, and he responded: “I shall not today attempt further to define the kinds of material I understand to be embraced … but I know it when I see it …”

My response is the same when attempting to identify a motivated buyer – I know one when I see one. If you’re in doubt, it’s unlikely they’re truly serious about buying a business.

First-Time Buyers 

First-time buyers are great buyers – if and when they decide to pull the trigger. Assessing their tolerance for risk, on the other hand, is difficult. Weak motivation is easily overwhelmed by one’s fears. And buying any business requires some degree of risk, and therefore confronting one’s fears directly. A buyer will only buy a business if they conquer their fears.

Previous Business Owners

If a buyer has already been a business owner and pursued and lived the American Dream, their motivation is more clear. If they have already owned a business, their expectations tend to be much more realistic than someone who has not.

Time Frames

Buyers should be able to identify a business and make an offer within 6 to 12 months. They should be able to close on a business within a year of starting the process. If the buyer has been in the market for longer than that, there could be problems. 

Occasionally, I see buyers who have been in the market for one to two years. I almost always dismiss a buyer if they have been looking for more than two years. One to two years is a coin flip.

Keep in mind that how long a buyer has been in the market is quite different from the amount of time your business has been on the market. How long it takes to sell your business is a completely different question. This discussion has centered on the factors that may influence how long a buyer is in the market looking for the right business. The more you understand about the potential buyers for your business, the more successful you will be in selling your business.

Don’t get emotionally involved with any one buyer.

Why Buyers Disappear

Buyers can leave for any number of reasons. A common scenario I see often, however, plays out like this:

Day 1

Seller: “I have a buyer who contacted me last week and is interested in buying my business. I want to see what happens with this buyer before I do anything.” 

Day 5

Seller talks to the buyer, and they schedule a meeting for next week.

Day 11

Seller and buyer meet, and the meeting goes great. Seller calls me and says, “I think he is going to buy it. I want to hold off before we do anything else.”

Day 13

Seller calls the buyer to move the ball forward. No answer. Seller leaves the buyer a voicemail.

Day 16

No answer from the buyer. Seller calls the buyer again and leaves a message.

Day 20

Still no answer from the buyer. Seller calls a third time and leaves a message.

Day 25

No answer from the buyer yet. Seller calls a fourth time and leaves a message.

Day 28 

The seller calls me, exhausted, and doesn’t know what to do.

I hear this story all the time from my clients. What has happened here, and what can be done about it? Why do interested buyers disappear?

Buyers are like everyone else – they’re busy and are likely considering multiple alternatives to acquiring your business. A buyer may initially appear interested and may later change their mind after considering another business. 

It may be easier for them to duck your phone calls and emails than tell you they’re no longer interested in your business. While this may be useful information to know, it’s irrelevant because it doesn’t change the process you should follow.

Selling a business isn’t easy. But if you keep it simple and try not to get emotionally involved in the process, you can greatly reduce the stress associated with selling your business.

The solution is simple:

Don’t get emotionally involved with any one buyer. This doesn’t mean you shouldn’t be aggressive about selling your business. You should be a go-getter, but keep a level head and focus on running your business during the process and remain emotionally detached from any one buyer.

Get ready for the sale upfront by preparing a confidential information memorandum (CIM) so that little energy is expended prescreening buyers, which allows you to remain emotionally detached.

Focus on running the business and don’t become too emotionally attached to selling it. Many sellers seem overly eager to sell their business and spend far too much time and effort thinking about the process, so they end up neglecting their business in the short term. 

Key Points

  • Keep cool and focus on running your business. 
  • Prepare a simple plan to sell and execute it with precision. 
  • Don’t become emotionally attached to the idea of selling your business or to any single buyer.


Once you have identified potential buyers for your business, you can determine how to best reach them. You may decide to go fishing by placing ads in the marketplace and letting buyers come to you. Or you may choose to use a targeted hunting campaign aimed at specific potential buyers. Don’t overlook other possible areas to look for buyers, such as through your personal and professional contacts.

As you start the marketing process, the importance of maintaining the confidentiality of your business information comes to the forefront. You can do several things to maintain confidentiality, starting with deciding what information gets released, controlling who gets that information, and dealing swiftly with any breaches. 

Confidentiality agreements and NDAs are critical components to be used with buyers seeking information about your company. Releasing information in stages allows you to keep control of your information and screen buyers at each step of the sales process. Screening potential buyers will also help ensure you are dealing with serious buyers with the means and determination to follow through on the purchase, saving you time and money in the long run. Understanding the differences between various buyer groups will help you determine how to best approach marketing your business while maintaining confidentiality. 

After identifying a possible buyer, the next step will be meeting them, so read on for more expert advice.