Synopses of Numbers 45 - 55 of 66 Obstacles to a Successful Business Sale
In the last issue (#27), we supplied short Synopses of Numbers 34 – 44 of 66 Obstacles to a Successful Business Sale. This issue will provide brief Synopses of Numbers 45 – 55 of 66 Obstacles to a Successful Business Sale.
"Press on. Obstacles are seldom the same size tomorrow as they are today. " Robert H. Schuller
Synopses of Numbers 45 - 55 of 66 Obstacles to a Successful Business Sale
To view the complete list of 66 obstacles, click on this article: Issue #23 – 66 Obstacles to a Successful Business Sale.
Following are brief summaries of obstacles 45 – 55:
45) Not Believing Time is of the Essence
Always assume buyers have other options they are considering. When qualified buyers express interest in your business, help move them through their evaluation process as quickly as possible. Cooperation with buyers needs to be a priority. If you drag your feet, they will too. Despite the need for patience mentioned in obstacle #43 in the previous issue, establishing reasonable deadlines is appropriate.
46) Failure to Facilitate Closing on a Timely Basis
The passage of time always works against the successful closing of a business sale transaction. If you or your advisors dither in responding to a buyer’s due diligence request, it creates a harmful impression in the buyer’s mind: “Why is the seller taking so long to respond? What’s going on? Are they manipulating information? Have I uncovered something they do not want to discuss or disclose?” If you are unable to respond quickly, it is extremely important to immediately communicate why and when the buyer can expect a response.
47) Sellers Surprised by Tax Implications
The tax bite in a business sale can be very significant. It’s important to understand tax implications prior to putting your business on the market. Don’t wait until you have an offer to evaluate.
48) Failures in Negotiating Representation and Warranties
Buyers feel they should be entitled to standard protections that other buyers receive in their acquisition agreements. If you were buying, your attorney would attempt to include the same language for your protection. In evaluating the severity of the representations and warranties, ask your attorney which of those protections he would compromise on if he were representing you as the buyer rather than as a seller.
49) Failures in Negotiating Non-compete Agreements
Buyers have a legitimate right to expect sellers to sign reasonable non-compete agreements. If you waver on this issue, the buyer will fear he will be unsuccessfully competing against you in a short period of time.
