Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

October 4, 2016

Things to consider when qualifying a business buyer

By Achim Neumann

handshake-1205055_640Of all the steps in the life cycle of a business, the exit is the one that generates the most excitement. All those long hours invested into growing an idea into a revenue-generating machine get rewarded by the hopeful large buyout, as well as the free time needed to enjoy it.

However, it is important for business sellers to carefully vet buyers, as there are many unqualified individuals for every suitable candidate.

Here is what an entrepreneur should consider when qualifying potential buyers for their business:

1) Do they have a time frame?

They should have a defined window in which they are prepared to do a deal. With no deadline, the resultant lack of focus wastes valuable time of the business seller.

While it would be ideal if all buyers were motivated to act within a short period, the seller should be prepared to impose their own limit on the amount of time that potential suitors can use before their chance to purchase the business vanishes.

If they miss the deadline, they’re out. Plain and simple. Asking prospective buyers if they will be able to respond with an offer to purchase the business within a given time frame is a polite way to do this.

2) What field/business were they in before?

There’s nothing worse than mis-communicating the skill sets required to successfully operate a business. Without making sure that a prospect has the background to handle basic tasks, the seller risks having the sale fall apart at the last minute. This wastes weeks of time on both sides.

Even if the sale got through somehow, the seller risks having their legacy tarnished if the new owner ends up running the business into the ground.

If there are only a few pieces missing with regards to the buyer’s business skills, training can be included in the deal to ensure a smooth transition between management teams.

3) How much money do they have?

While asking this question may be a social faux pas in many quarters, it is a highly relevant query when a seller is looking to complete a successful sale with a buyer.

There are many ambitious individuals that may seek to cut a financing deal with a seller to make up for their lack of capital up front.

However, it may not be wise for them to take on a sizable amount of risk when their goal is to offload the responsibilities of their company to a third party so they can cash out without worry.

The buyer should be able to prove to the seller that they have access to other sources of capital, such as from banks or other lenders, or that they have enough liquidity in their accounts to purchase the business outright.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

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Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

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Dennis Frazier

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Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs

“A Neumann & Associates is the only business broker I would use or consult with. They have assisted with 3 business sales over the past 15 years with me. They are honest and sincere and have always performed better than my expectations. They are the only one i would use for the sales of my businesses.”

James Belanger, Business Owner

“I wanted to take a second to commend the exemplary customer service from both you [Karin Neumann] and Mr. Valentino. It’s both a rarity in the industry, and very much appreciated.”

Andrew G., Investor

“We worked with Neumann & Associates to investigate the purchase of a research company in 2010 and found Achim to be capable, forthright and realistic. His depth of experience enabled us to fully understand our options, offering creative options that might enable the acquisition. While we didn’t acquire that particular company at that time, we know exactly who to call whenever we’re looking to buy or sell a business.”

Daniel Coates, Buyer
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