It can be very, very frustrating. You find a business you really like but discover that it is already under contract with another buyer. It can be tempting to give up and move on to the next business on your list, but there’s a savvy strategy that can significantly increase your chances of acquiring that dream business. Put in a backup offer. 

Why?

It secures your position in line.

One of the primary reasons for submitting a backup offer is to secure a position in line if the primary contract falls through. In the unpredictable world of business transactions, deals can and do fall apart for various reasons – such as financing issues or disagreements over terms. By having a backup offer in place, you position yourself as the next in line to acquire the business, giving you a valuable advantage.

It shows how serious you are about the business.

Submitting a backup offer demonstrates your genuine interest and seriousness as a buyer. Sellers often appreciate proactive buyers who are willing to invest time and effort into the deal. This can create a positive impression and potentially influence the seller to consider your offer more favorably in the event that the primary contract fails.

It might give you a leg up in future negotiations. 

In some cases, the primary contract may fall apart due to negotiation conflicts or disputes over terms. When you have a backup offer ready, it can provide leverage for renegotiating terms with the seller. Knowing that another viable offer is waiting in the wings may encourage the seller to reconsider certain terms, potentially in your favor.

An important note: submitting a backup offer typically does not require a financial commitment (like a deposit). You can, however, add a deposit to you backup offer in order to strengthen your position – just ask your business broker to add a fully refundable deposit clause in the event your backup offer is not needed. This means you can pursue other opportunities while keeping your backup offer as a safety net.

In the competitive world of business transactions deals fall apart every day. Putting in a backup offer when you really like a business that is already under contract can be a savvy move that pays off in various ways. It positions you as a serious buyer and can provide negotiation leverage. While it may not guarantee success, it significantly increases your chances of getting your hands on the business you really want if the primary deal falls through. Consider the strategic advantage of the backup offer – it just might be the key to unlocking your dream business.

Have you been looking at businesses and have only liked those already under contract? Would you like to know more about how to put together a backup offer? Ask us! Leave any questions or comments and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com