Tweet

Why Dr Jekyll would not be a good business buyer

Guest post by:

Article Overview: We're all familiar with the story about Dr. Jekyll and Mr. Hyde; the person with two completely different personalities. Just as there are different types of buyers with different motivations, there are also buyers with different types of personalities. If you're planning on buying a business or if you own a business that you want to sell, here are some Dr. Jekyll "traits" that would discourage a seller revealing too much information about their business.

Why Dr Jekyll would not be a good business buyer

We're all familiar with the story about Dr. Jekyll and Mr. Hyde; the person with two completely different personalities. Just as there are different types of buyers with different motivations, there are also buyers with different types of personalities. If you're planning on buying a business or if you own a business that you want to sell, here are some Dr. Jekyll "traits" that would discourage a seller revealing too much information about their business. 1. Job Seeker

Try to establish this one early on as they are a complete time waster. Asking for a financial statement generally takes care of them. They have no money and no ambition. They don't like their current job so if they find the perfect business with zero down payment, they will be made. There are quite a few job seekers out there so flush these out early.

2. Investor Using Other People's Money

The investor is the person using other people's money and presents themselves as a cash buyer or leader of an investment syndicate authorized to buy a viable business for sale. Once again they can be a time waster so isolate them quickly. The best way to do that is by either requesting a financial statement or request a meeting of all parties that are investing in the business. If the investor lives interstate or overseas you have your answer - would you lend money to a friend or family member to buy a business you will rarely see?

3. Savior

This person generally has a couple of traits. Often they love to talk and have fairly strong opinions; which can give them credibility, but they present themselves as the person which is going to buy the business to turn it around and keep the jobs of all the employees. The quickest way to isolate this one is to ask for a financial statement as chances are they won't have any money.

4. All Cash

The all cash buyer is tricky because you so want to believe they are genuine and that your business is the perfect match for them. They know this, hence the reason they claim to be a cash buyer. However, all they do is waste your time because the cash doesn't exist. If they had that much cash, they would use that money to buy a more expensive business that produces a greater cash flow.

One of the all cash buyer's tricky behaviors is to convince you that they are genuine and then use the lure of being a cash buyer to reduce your price. It is very easy to flush this buyer out-simply ask for a verification of funds and make sure the proof is an original document-not a photocopy. It is perfectly fine that they redact the account number or other sensitive information.

5. Obstinate

This one is really easy to identify: lots of talk, lots of promises and seemingly the perfect buyer (similar to the all cash buyer). But the obstinate buyer refuses to sign the confidentiality agreement. The solution to this one is really simple. Move on and don't waste any more time with them. If someone refuses to sign a confidentiality agreement, imagine how difficult they will be when you are getting into detailed negotiations.

Owning a business and deciding to sell comes with many challenges. Work to find the ideal buy that understands your business and industry otherwise the transaction can be forced and will, as a result, at some point simply fail.

Related Articles
  Salesmanship and Empathy
  When selling a business check the business buyers credit history
  The importance of choosing the right buyer when selling your business
  The Sales Meeting Agenda
  5 tips to use when selling your business

Article Tags: Andrew Rogerson, business, Business broker Sacramento, business escrow, business for sale, business plan, Business Team Roseville, due diligence, exit plan, franchise, franchise for sale, Murphy Business and Financial Sacramento, Sacramento business broker, Sacramento business ownership, sell a business, Sell a business, succession planning



Related Forum Posts
How do you set a value on a business? - Hello there! I have a friend that's looking to sell their business. I would like to know how a business gets valued. Can someone help me here? Here's some fairlyaccurate numbers: Gross sales: $153,000 (3 year avg) Income: $75,000 (3 year avg) I've heard that there's a ratio that can determine the value. Does anybody know what it is? The buyer wants to see P&L's. Is their some type of disclosure agreement that protects the seller... How is this typically done? After all, the buyer is a competitor... Buyer has suggested deposit, then pmt plans. I'm under the impression that this is common practice in the sale of a business. If so, what's the best way to approach this proposition as a seller? Thanks in advance for your feedback!
Re: Selling my business.... - Sounds like you're in a tough situation. First things first, you really need to get some clear answers from the landlord. If they're not willing to extend your lease, then you're obviously in a pickle. I would do everything I could to negotiate a new lease. If landlord is balking at renewing the lease, find out why; Is it because they're looking to increase rents? Have you had problems with them? Are they planning to remodel? The landlords answer may not be what you are expecting and could possibly be a simple hurdle for you. I would try and have a face to face meeting as well... you'll learn more from their body language and pleading your case is going to have more impact. Without an extension on your lease I can't imagine how you're going to convince a buyer to take over your business. [quote:cbrn6le2]When I sell my business, does my landlord have to resign with whoever my buyer is? [/quote:cbrn6le2] The answer is probably no.
loan - What are all mortgages loans for first time buyer? What is the current interest rate on mortgages loan? I am looking for some personal experience from the first time buyer. Where is the best place to get mortgages loan? Is there a federal mortgage loan? I am looking to buy in the next few months and I need some one to guide me on loan and everything about home buying for the first time.
Feedback is Important - I made transactions on ebay and its quite a nice idea to sell or buy on ebay but it don’t let you feel the product otherwise it is a good idea to buy and sell products online, its good to leave or get feedback as it will give others to see your history on the site that how good buyer or seller are you.
Re: Is This The Answer For A Busy Entrepreneur?? - I've spent considerable time on a few freelancing web sites.. They are web sites that allow buyers to hire coders to do odd jobs. Everything from article writing, to complex software programs. There is a highly regarded reputation system embedded within it that monitors everyone (both buyer and coder) to ensure bad apples are not accepted for future jobs. It's worth a look! You get what you pay for though. Many bids are made by non-English native speakers from all over the world and their price point is reflective of that. The buyer has to exercise some diligence in selecting the most qualified candidates.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Entrepreneurs and the “Oh! No!” Trap

What If You Had a 100% Success Rate?

The new marketing question. Will they follow?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.