Your time is your most valuable commodity. So, when selling a business, it’s important you understand that many “buyers” are not truly buyers. Sometimes, they are window shopping or acting out a fantasy of buying a business. In other cases, they would only plan to buy if they were to find the “deal of the century.” The last thing you want to do is waste your time trying to work out deals with people who aren’t serious or qualified buyers.
The Plus and Minus System
The best way to find a serious buyer is to use a “plus and minus” system. This system will help you weed out the window shoppers from buyers that are truly worth your time.
First, let’s evaluate factors for which you’ll want to deduct points. If a buyer needs outside financing, then subtract 4 points. Likewise, if a buyer has been looking for a business for six months or more, subtract another 4 points. If a buyer has no cash available, you should subtract 3 points. Additionally, if a buyer is currently working in the corporate world, you should also subtract 3 points. These are the four primary reasons to subtract points, but they are not the only reasons.
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Below are a few reasons to subtract 2 points or 1 point from a prospective buyer’s rating.
- You learn the buyer’s spouse is not supportive – subtract 2 points.
- The buyer uses a legal pad or clipboard and takes copious notes – subtract 2 points.
- The buyer indicates they are in “no rush” and want to find the perfect business – subtract 2 points.
- The buyer is under the age of 25 or over the age of 62 – subtract 1 point.
- The buyer is currently renting, even though they have lived in the area for some time – subtract 1 point.
Factors to Add Points In
There are also many factors that would make a buyer fall onto the “plus” side. If the prospective buyer does not currently have a job or has just resigned from their job, then add 3 points. Likewise, if a prospective buyer acknowledges that books and records are not the only metrics by which to judge a business, add 3 points.
Add 2 points if a buyer has enough money to buy the business and another 2 points if the buyer currently has no dependents. If a close relative or family member currently owns or has owned a business in the past, then add 2 points. If the buyer is between the ages of 25 and 62 add 1 point. If the buyer is a skilled worker or professional, add 1 point. Finally, if the buyer does not consider location to be a prime consideration, add 1 point.
This streamlined, straightforward, and relatively simple system does work. Use this system consistently, and you will quickly eliminate a large percentage of window shoppers. While no system is perfect, this “plus-minus” system for accessing prospective buyers will save you countless hours and many potential headaches.