Some business-for-sale transactions are quick and simple, closing in a week or two. Others take months, if no years, to close. There are many factors to the speed of the transaction. One of these is the winnowing away the disagreements eased or not by the temperament and flexibility of the parties.
Take the home accessories store. The purchaser loves the store. It meets all of the husband and wife purchaser needs: Right location, Right income, Right price, Right fit with work-life preferences.
The seller has had the store for a number of years and put his brand on it. A key staff member has been managing the store. The seller has made a nice income from the store and is nervous about maintaining a quality operation and protecting the amount he has financed. Further, the seller has been providing some inventory items from his personal manufacturing business.
An offer is made with various contingencies. The seller is hesitant and suggests that extraordinary protections have to be put in and then the back and forth…why, what, how. The weak of intent buyer could back off. The highly intent buyer will push forward and, likely, eventually both buyer and seller will give something and the offer is signed.
Then due diligence begins and the same back and forth can continue with extensions in timing, revisions to the offer, etc.
The broker’s role is to know when she should carry the messages and when it makes more sense to bring the parties into a direct discussion to resolve issues. Both parties should not minimize the value a broker can bring to this part of the transaction. It is not all done just because someone has made the offer in the business-for-sale transaction…it can take months, prices can change, things that were of value at the time of the offer become not important later, and those not important become important..
