This last week I had a deal that went under contract. That in and of itself is not unusual, what was unusual was that the deal had 6 offers on it at the same time. All on their surface were reasonable and when it came down to the end game decision what was the tipping point for the seller was who was the best fit.
This was not surprising to me but it was a shock to the buyers. Here are some observations:
> Seller discounting heavily the price, asking for finance, and asking for receivables was excessive – you can give and take a little but good deals are good for everyone….not every sale is a distress sale.
> If you cant write an offer and your broker doesn’t have the ability to remotely prepare a document and get it signed you look like you are from another century and cant go the distance of due diligence and or managing the business go forward.
> If you are represented by a broker, don’t go around him or her and try to work a deal on the side. Sellers and Brokers view that as unethical and since an nda lays out protocol and process and is a legal document….why would you think it would put you in good stead to violate it and then tell a seller you will honor your side of the transaction and terms?
> Don’t be surprised you don’t get a counter when there are multiple offers…you need to come with your best deal if you want the business.
> Show respect as a buyer…you are being judged as a buyer as much the seller is being judged by you.
> Understand the contracts your using and the motivations of sellers. Believe the Listing as represented…you are not going to get to do due diligence on the front end prior to contract…at least not a due diligence that is legitimate in any way.
The bottom line Mr. and Mrs. Seller is that in order to navigate the small business sales process you need to understand the rules of the game and recognize that good businesses are in demand and that what knowledge you bring although valuable may not serve you well in the negotiation process.