Received a call yesterday from a small business owner who is utilizing my
TIIC Method of selling a business and he had a request from a business buyer in their offer to buy his business.
A part of the purchase agreement directed:"The buyer would have the opportunity to observe the business and work with the owner for 60 days and then determine if the business was the right fit for he and his wife."It also went on to say that if basically the buyer did not like what he saw during the "observation period" they could back out of the deal!
This happens quite a bit especially in "CASH oriented" small businesses where buyers want to observe the flow of money & especially in the inward direction.
I advised this owner/seller that he should not consider such a proposal since this makes it too easy for the buyer to back out of the deal & and they usually do under these circumstances. I told the seller that if he should entertain such a crazy request he should demand a sizable non-refundable deposit should the buyer back out.
The owner/seller in this situation risks sharing and losing any trade secrets, valuable key client contacts, and taking the business "off the market" for this length of time could turn away other more realistic and serious business buyers!
Don't let potential buyers "borrow" your business, it's not worth it.•
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