Recently, I’ve met with a couple business owners who had what they believed to be very solid buyers ready to purchase their businesses only to have each of the deals go sour. These weren’t “pie in the sky” buyers who just expressed interest. These were buyers who did all the due diligence and, in one case, even had check issued. The buyer actually showed the seller the cashiers check he had for the down payment. The documents were all in place. The work of the attorneys were done. The parties just had to close the deals. Then, in both cases, both deals fell apart.
The oldest saying in business sales goes something like this: “it’s never a deal/sale until you have the check.” Unfortunately, for business owners, its not that easy to just say, “oh well, we’ll get the next one” like salespeople can do.
Unfortunately, emotions run high and, once the buyer gets really serious, business owners start to mentally transition to the next chapter of life. Money is, in their minds at least, already being spent. Trips might be planned. The spouse may be really counting on this next chapter of life. Whatever the reasons, the emotional disconnect between the business owner and his/her business is really tough to reverse. Once the business owner has mentally “jumped ship” it’s really hard to get back on the boat. The seas of business can be rough. Business owners work hard to beat the odds and create businesses worth buying. The buyer is found and everything seems to be in place. Then, the business owner mentally jumps ship. The business still functions but the owner is floating away from it. The ships starts to sail away and the business owner begins to watch. There may be involvement, but it’s only by force of habit. The passion and emotion is going and there is little being done to stop it.
As a business owner, you’ll eventually be faced with this predicament. What will you do? Will you fight the urge to spend the proceeds from the sale of your business…before the sale is closed? Will you be “optimistic” and believe this IS the buyer who will purchase your business. Or, will you learn from the above deals gone wrong? Will you keep your head down and keep working until the day the business is closed? Will you stay emotionally and mentally involved?
Until you’re there, the questions are easy to answer. Once faced with the situation, however, it’s much harder. Percentages say there is an 80-90% chance the deal will close if agreements are finalized. Above are two painful reminders of why you need to stay connected to your business until the deal closes…and the check is in your hand (or better yet, is cleared in your bank account).
Peer Business Group
“Helping our Peers Buy and Sell Small Businesses”