In an earlier post (To buy a business – make an offer!), we talked about the importance of getting an offer in front of a seller if you are serious about buying a business. Here we want to discuss how to make that offer if you don’t yet have all the information you would like to see.
In theory, you may think it impossible to make an offer with incomplete information. In the real world you will never have all the information you desire. You must go with what you have and make your offer. If your expectations cannot be confirmed or the information you have been provided cannot be verified, you should be able to rescind your offer and walk away.
It is also very frustrating to spend a lot of time and money on research and investigation only to discover your and the seller’s expectations are so far apart a deal cannot be done. Or, conversely that someone else has engaged the seller’s time and attention with their offer.
Once you have identified a business of interest and done enough research to determine under what conditions you would buy it – make your offer. It will be your offer and will contain the terms, conditions, and contingencies that you are comfortable with based on the information you have. It will likely provide for a period of due diligence to permit you to gather and analyze additional information and allow you to retract your offer during the due diligence period if you find details not to your liking.
Presenting an offer:
- gets the process started
- identifies you as a serious buyer
- energizes both you and the seller to move the deal along
- is the start of a meaningful conversation
and most importantly
- forces the seller to begin to reveal to you which elements of the transaction are most important to him/her.
Questions? Your business broker can help.