The process of selling a business is demanding work. As the seller, you will be required to invest no small amount of time and energy every step of the way.
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When a potential buyer finally comes along, eagerness to close the deal can cloud your judgment - unless you know when it's time to walk away.
Unfortunately there are no hard and fast rules that dictate when it's time to give up on a potential buyer. However, it is possible to see signs that the deal is disintegrating. Your best safeguard against becoming overly attached to a potential buyer is to surround yourself with people capable of helping you look for signs that the deal probably isn't going to happen.
When Negotiations Stall Out
Negotiation is a process. But sometimes buyers intentionally stall the negotiation process, hoping to wear the seller down on price or receive concessions. Walking away from the negotiation process can be painful, especially if you don't have other serious prospects. Then again, your willingness to walk might be the one thing your buyer needs to get serious.
When You Lose Confidence in the Buyer
The selling process involves certain intangibles, and confidence in your buyer is one of them. If at some point in the process you begin to suspect that the buyer is all talk and no action, you're probably right. Some "buyers" aren't buyers at all, but rather dreamers more interested in the idea of owning a business than actually owning one. You're better off moving on to another buyer who is more likely to actually make it to closing.
When You're Tempted to Abandon Selling Requirements
Before you put your business on the market, it's important to carefully construct a list of minimum requirements you hope to achieve in the sale, including price limits, financing terms, and other concessions. When a buyer pushes you to go outside your minimum requirements to make the sale, that's a good indication it may be time to walk away - especially if closing the deal jeopardizes your financial security.
When the Buyer is Secretive
Throughout the selling process, prospective buyers will scrutinize every aspect of your company, so why shouldn't you apply the same level of scrutiny to your buyers? After all, you have something important at stake, too, since in many cases your reputation will still be attached to the company long after it's been sold. If a buyer is highly secretive, it's usually because he has something to hide. When that happens, don't walk away - run!
When the Professionals Tell You to Walk
Smart sellers rely heavily on professionals like lawyers, accountants, and commercial agents to achieve their selling goals. If your professional tells you to walk away from a buyer, do it. Assuming you've selected your professionals carefully, they will have your best interests in mind, even when you are finding it difficult to pass on a prospect.