Tactics For Assessing Whether a Potential Buyer is Qualified

Assessing a potential buyer for your business can be an absolute rabbit hole when it comes to wasting time, -your most valuable commodity as a business owner.

We recently asked our community for some tips on best practices for qualifying potential buyers, and below, you’ll see the preferred tactics our BizNexus Community Advisors and M&A professionals referenced as some of their reliable go-to strategies for managing this successfully at scale, -an artform not easily replicated.

Does the Buyer Provide you Information Upfront?

As part of the vetting process of first-time buyers, three administrative items are requested/required. 1) Up to date resume or curriculum vitae. 2) Personal financial statement, 3) a current credit report - secured by a potential buyer. Next, an in-depth conversation about their motivation to become an entrepreneur.

For first-time buyers who have the right attitude & awareness, additional due diligence on them is done to further evaluate their buyer worthiness.

Show me, upfront, your money. Enough for the deal you intend. Prove, right now, that what you say you can do is true.


Can The Buyer Provide You With Their Previous Experience?

Prior experience in deal-making or related business operations.

For an individual buyer, they need to have prior experience in deal-making.

Interview them, assess background experience and get a loan pre-approval.


Does the Buyer Have a Funding Strategy?

As part of my initial conversation, I usually just ask them what their strategy is to fund the acquisition. If an individual investor can’t tell me then that is a red flag. If they are relying on the seller for too much financing, that’s also a red flag. As soon as they ask for tax returns, I ask them to complete a personal balance sheet. If they are PE or VC and say they have committed funds, they I tell them we will need to see the funds or know who the investors are before too long to see their reaction.


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We bring together entrepreneurs, investors, and M&A experts to master the process of getting your business acquired or recapitalized, so we can learn how to set up a great deal team, financing, and exit plan from a network of industry professionals & advisors.

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