These days, many business owners are struggling. That does not mean that your business has no value. Even with setbacks caused by the lockdowns and COVID-19, your business could have a great deal of value to the right person. If you can keep it viable or close to viable for now, you may be able to reap significant rewards.
Even if your business is in significant distress, it is very important to find the right buyer. The ability to afford the purchase price is only one consideration. It is also necessary to find someone who will be a good fit.
The way to determine this is by talking to prospective buyers beforehand. According to Forbes, asking good questions of both the buyer and yourself can help you find out what you need to know.
1. Long-term fit
You should determine whether the company and the buyer will be a good fit in the long term. This means examining the skill set that the buyer brings to the business. However, perhaps even more important is the buyer’s mindset, and whether it is compatible with that of your employees, vendors and customers.
2. Business experience
Avoid setting your prospective buyer up for failure by evaluating the business experience that he or she brings to the table. Prior experience should at least be applicable to your company even if not exactly in the same industry.
A prospective buyer should be able to not only afford the purchase price but also have enough capital to fund the first year of operation. You can determine this by asking the buyer to fill out a personal financial statement.
4. Time frame
Some prospective buyers start making inquiries months, or even years before they are ready to buy. If you are ready to sell as soon as possible, going too far down the path with buyers such as these is a waste of everyone’s time. Therefore, be sure you have a conversation early in the process to determine whether the prospective buyer’s time frame aligns with yours.