Qualifying Potential Buyers
Determining who is qualified to buy

How Do You Determine Who Is a Qualified Buyer?

Selling your business is a difficult and time-consuming task, particularly if you're not using a broker. It's important not to waste too much time with "buyers" who are going to do just that - waste your time.

Also consider a buyer's initial offer. If it is as low as 50 percent of your original asking price — or even lower — the prospect may just be looking for desperate owners in the hopes of scooping up a bargain.

Today, one option that many small business owners use to expand their base of qualified buyers is to offer financing themselves. If you choose to offer seller financing, have the buyer sign a loan agreement drawn up by your lawyer. Remember that when you offer financing yourself, you risk the buyer defaulting on the loan. One precaution is to ask for significant collateral on the amount of the loan. Even though you may have run your business profitably, there are no guarantees that the new owner will be able to do the same.