As business brokers this has to be one of the most frustrating aspects of the job.
You have a motivated buyer who is very interested in a particular business and a decent offer is on the table. You request 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 you forward to your buyers, but the rest of the information your buyers requested has yet to be produced. So you wait.
You get constant calls and emails from your buyers, and all you can tell them is you haven’t received the information from the seller so your hands are tied. The inevitable conclusion of this situation is the deal will fall apart and the buyer will move on.
Why does this happen?
Some sellers go on the market with the initial intention of selling, but once they are in the process, they realize
- that it can require a lot of work on their part to produce information and be available for questions/meetings, and
- they are shortly going to be out of a job.
This 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 yes, you might need a new 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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Fort Myers, FL 33907