Never count your chickens till the eggs hatch!

Kansas City business broker advice

Never count your chickens till the eggs hatch!

This old saying has never been more pertinent than when it comes to selling your business. All transactions between two parties have a certain amount of risk involved, that much is obvious. Imagine how many get it wrong when buying a house or a vehicle. But in real terms due to the complexities that have to be dealt with, the business sale is probably the most fraught.

As you will have no doubt been in negotiations for quite a length of time before the final deal is completed and the papers signed, the moment when the signatures are put on paper and all parties are in agreement will bring a sigh of relief. But don’t get too excited, it’s not over yet!

The buyer may have signed the offer to buy agreement, but now the real problems can begin. No business is ever whiter than white. There are always a few skeletons in the closet so to speak, no matter how small. Now the buyer has this period of time to use his Due Diligence to make sure he wants to continue. This allows him to review all of the documentation that has been presented to them, looking for those maybe small problems that could cause the deal to fall through.

This is where you hope that you and your team have thoroughly done your homework. The team of professionals you have hopefully used to assess and do an appraisal of your company should have checked for any problems. Unfortunately minor issues are still often missed, they might actually be totally innocuous, but anything can stop the sale. These can cover a very broad spectrum, whether it be with your accounting or with even with your client base.

Be sure that if anything is not as it should be, the prospective buyer will use his Due Diligence to find it. If in the event he does find a problem or discrepancy, no matter how small, it will likely cause a renegotiation at the very least. This can be detrimental to your bottom line of the sale, unless you can give assurances and remove the problem. At its worst, this scenario can lose you the sale and the process will have to start all over again with a new buyer.

If this becomes the case it will be for most a hard pill to swallow. All the time and effort getting this far only to have the sale slip away because of an anomaly can be soul destroying. The thought of continuing to run the business for a longer period of time and having to then try to find a new buyer is not the ideal situation, to say the least.

Therefore to reduce your chances of being disappointed in the final furlong use as much diligence of your own whenever possible in preparing for the sale. Then the Due Diligence of the buyer will only result in a healthy outlook and conclusion to your business sale.

Leave a Reply

Your email address will not be published.

New E-book - 7 critical points every business owner Must know before selling!Sign Up and Download