We’ve talked about this issue a handful of times, but it is so prevalent in the day-to-day of buying and selling businesses it merits revisiting from time to time. A great business broker spends their work day keeping business deals on track and moving towards a closing table, but they are only one part of a very complicated process.
As such, you as a buyer may get frustrated by the pace of your transaction – but in many cases there is absolutely nothing your broker can do.
What you need to remember is the only cure for tied hands is patience.
Here’s an example:
You are a motivated buyer who is very interested in a particular business and have put a decent offer on the table. You request through the seller’s business broker that the seller send over the information required for due diligence, like financial records, tax returns, etc.
Then you wait. And you wait.
Then the seller sends over partial records, which get forwarded to you from your broker, but the rest of the information you requested has yet to be produced. So you wait.
You constantly call and email your broker, and all they can tell you is they haven’t received the information from the seller so their hands are tied.
Why does this happen?
Some sellers go on the market with the initial intention of reaching a closing table, but once they are in the process they realize that selling their business requires a ton of work on top of what is already required for the day-to-day operation of their business (producing information and being available for questions/meetings). Then they completely panic because are shortly going to be out of a job.
These realizations can cause some sellers to develop a decent case of cold feet. It can also cause a seller to be defensive, as constant requests for more financial information can give the impression that the buyer is trying to dig up dirt on the business.
This, of course, is not the case. Buying a business is a huge decision, and most buyers are going to want a thorough look at any business before they pull the trigger.
So how do you figure out if the problem is your broker or the seller?
If your broker is really good about answering your questions, is prompt with returning phone calls and emails and has been forthcoming about the issues they may be having with the other side – then their hands are probably are tied. If it takes your broker ten days to return your phone calls, then the problem is probably the broker.
As with everything in a business transaction, a good dose of patience will go a long way. This does not mean, however, that you have to sit around and wait for a seller to deliver information they have no intention of ever giving you. Talk to your broker if you have concerns about time frame issues, and understand that sometimes there really isn’t anything a broker can do to speed up the process.
Are you a buyer who is having a hard time getting information out of sellers? Are you concerned that the issue may be with your current broker and not with the seller? Please feel free to leave us a comment or question here, and we will be happy to assist you.
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