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Is your Business for Sale? Here’s a List of Bad Buyers.

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in The Business of Business Finance

Question: What makes a bad buyer?

  • Someone who can not or will not pay full value (or higher) for your business
  • Someone who will require an earn out that is unrealistic, someone who pays very little up front cash
  • Someone who wants to use your future earnings to pay for your company.  
Perhaps your bad buyer is someone who wants to use their private, illiquid stock for a bulk of the purchase price. There are many variations of the bad buyer, unfortunately, there are many more bad than good buyers, especially in today’s market.
The challenge, of course, when selling your business is that you will not be able to identify these deal restrictions until you get to the “LOI phase” which is when an interested buyer will submit an Letter of Intent or Letter of Interest.

Unfortunately, the LOI phase will come months after you have begun the process of selling your business. With that in mind, here are a few early ...(register to read more)

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