Selling a business is usually a long drawn out process that can involve months of due diligence, require just as long negotiating, and an equal amount of time for the paperwork to be completed.

Private equity executives like Greg Lindae, who is a recognized expert is spotting buying opportunities for investors, make their living on purchasing companies that have great potential.

What do they look for when looking at a company to purchase? And how could you get people like him to move fast? Here is a list of a few of the key things:

Have all due diligence information prepared and ready for review

In order for people to assess things more quickly, you need to have an executive summary of the key elements of the business. This includes information and contracts with key employees, vendors, and clients, all relevant business contracts such as office and factory space leases or mortgage agreements, equipment leases, vehicle leases, dues and affiliations fees, unusual expenses, and anything else needed to get an accurate snapshot of the business. Buyers should be able to look this document over and determine if they have a strong interest in the business.

Pre-screen potential buyers

If you have a business that has potential for growth, you will likely be approached by all sorts of investors. Some will be highly motivated, but not have the ability to purchase your business, others will have the capital to buy but will want to move at their own pace. You ideal candidate is one that possesses an ability to purchase your company and is highly motivated. What you need to do for a quick sale is to weed out the ones who cannot meet both criteria.

A good way to do this is to put in place some means of screening potential buyers. A good suggestion would be to require that after reading the summary of the status of your business and found attractive by a buyer, that buyer would place a small but meaningful reserve in your attorney’s client trust account before they begin due diligence. You would then collaborate with this buyer on due diligence and if your company meets the due diligence requirements within the timeline agreed to by both parties and the buyer decides to walk away, you get to keep the reserve. If they make the purchase, the reserve would count toward the purchase price.

This strategy will mean only serious buyers will come to the table. If you have several buyers who agree, when you decide on one purchaser you can return the reserves back to the other suitors.

List any substantial financial assets and liabilities

One very important issue to be explored by any potential buyer will be what major assets and outstanding liabilities the company has, and for a quick sale these should be laid out clearly and in front. On your company summary that is first being provided to suitors, list all of them plainly.

If you have a five year contract with a reputable company to provide them with $5 million dollars in product per year and you are in year two of the contract, this is something you want buyers to see immediately. The same with your having a loan with an outstanding large balloon payment due next spring. Buyers will want to know this as well. Getting to these important areas quickly allows for quicker decisions by buyers.

One additional smart idea is to engage a reputable company to assist you in selling your business. Be careful however and make sure to engage a company with a track record for fast successful sales of the type of business you own.

Comments are closed.