What to Look for in a Buyer

Look for buyers with proven experience in acquisitions and investing. Seasoned professionals understand the process, know what they want, and are more likely to close successfully. First-time buyers often encounter unexpected obstacles they're unprepared to handle.

Industry knowledge is valuable, but be cautious of buyers who are direct competitors or in closely related businesses. While they may understand your market, they also have clear conflicts of interest during due diligence that could work against you.

This is critical. External financing sources can be unpredictable, regardless of how certain they seem initially. Buyers who need bank approval or investor funding introduce additional risk that's beyond your control.

Find out if the buyer needs approval from family members, partners, or investment committees. Each additional approval layer creates potential roadblocks. Both strategic and financial buyers typically have multiple committee approvals to navigate.

Understand their timeline and requirements at each stage. Ask about deals that didn't close—what went wrong and why? This gives you insight into potential sticking points and whether they're realistic about the process.

Some buyers treat initial offers casually and use due diligence as an opportunity to renegotiate terms. You're most vulnerable to pressure tactics during this phase, so it's important to know their reputation upfront.

If preserving your company's culture and employees matters to you, understand their intentions. Strategic buyers often integrate acquisitions into their existing operations, while financial buyers typically plan to sell again within a few years. Either way, your business will likely look very different in the future.

Just as you'd check references before making a key hire, ask potential buyers for references from previous sellers. Speaking with other business owners who've worked with them can provide valuable insights into their process and reliability.