Selling your business can be frustrating. Evaluating the offer and getting it executed is the toughest part. The common notion that ‘if an offer is too good to be true, it might just be’ holds a lot of wisdom at this time. With the evolution of complex market assets and technologies, the ways of cheating and frauds have also evolved. And for all you know, you could be walking into a deal that is either one-sided or simply a trap meant to cheat you and take control of your business.
Following are some of the ways in which you can avoid being disappointed. Consider yourself warned!
1. Don’t Allow the Buyer to Start Working in the Business Unless Full Payment is Made
The handover of the business either takes a long time or is done quickly. You will have to communicate with the potential buyer to clearly define the timeline. In any case, allowing the buyer to start operating a part of your business without receiving the full payment is a bad idea. The buyer can harm the interests of your business with his interim decisions and make you dependent on him for the continuation of the business.
2. Beware if the Buyer Agrees to the Price Without Enough Negotiation
Before selling the business, you would have evaluated the worth of the business. It is not unusual for you to overvalue the business, and so, may be tempted to grab the deal that you had anticipated. But that is not how the market works. Any buyer who is willing to buy the business without much negotiation may have some red flags that you may not see. A genuine business deal involves proper and often lengthy negotiations to arrive at the true value of the business that both parties are satisfied with.
3. Do a Thorough Background Check
With deals that take place in millions, it is advisable to take into account the buyer’s background regarding the financial status, credit-worthiness, legal documents and other essential elements that will affect your business in the future. It is advisable to hire a team of advisors who would help you with the process. Online platforms such as Tobuz.com can help connect you with the professionals who have expertise in the field of buying and selling businesses. These experts will help you avoid mistakes, assess the deal value and meet the desired expectations from the transaction. Save time, effort and money by working along with these experts who know how to get the best value for your business with little hassle.
4. Don’t Allow the Buyer the Control of the Business Even if there is Collateral of the Stock
After you have started the transaction process, do not disengage from the business and the process. Many sellers assume that the middlemen are enough to handle the entire process. A tempting offer at this time could be stocks which are offered as collaterals for taking over the business. This is risky and could land your business operations in trouble if the buyer has no intention of completing the transaction. Remember to not to hand over the control of your business entirely to the buyer until the deal is closed and signed with all the formalities considered and dealt with.
5. Fix a fall-through fee
After months of negotiation, the deal may finally break off, resulting in substantial loss of time, effort, and even money. To weed out non-serious buyers, you can fix a break-up fee which the buyers will have to shell out as a way of compensating for the efforts put in by you. Buyers who intend to cheat and work their way around with complicated transactions are likely to stay away from such deals.
6. Don’t Limit Your Search for Buyers to Offline, Go Online
There is nearly unlimited potential online with authentic buyers and sellers of the business coming together to get the maximum value for their deals. Online discovery platforms like Tobuz.com can help you find potential buyers across several geographies and industries. More potential buyers, the safer it is for you to complete the deal without the risk of online fraud.
Stay alert, broaden your horizon and sell your business like a pro.