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Understanding Business- How involved can a person get before deciding to buy.

I can afford to make amistake in buying a business. Do sellers ever allow a person to work closely in the business for a period of time before deciding to buy. Can this be in the contract womehow?

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Answers (2)
Steven St
World Business Partners, Inc
Los Angeles County, CA

Wow Don answered that question really very well. I would take his advice!

You want to look at it from the Seller's point of view. The risk of you NOT buying after training you and showing you everything is exceptionally large. Most business owners would not accept an offer like this under any circumstance, but its ALL neg.

But you have to look at it from the Seller's point of view. You would have to overcome all of the Seller's objections and fears if you care to make an offer like this.

Don mentioned a large Non-refundable deposit. As a Buyer I would never make an offer like that, but as a Seller I wouldn't accept anything less. And there lies the problem....

Apr 25, 2009
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The BAF Group LLC
MD

WOW! What a great question, which can take a book to answer. Usually, this is not possible. But there are some notable exceptions. The Seller is going to want to know that you are serious. His (or her) first question is: Why - and in detail? If you work there, in what kind of position? For what purpose? Do you expect the Seller to pay you, while you are there? (I don't think so!) What will you be doing, exactly? If you are there to only to observe, what reason will you tell the employees, clients and vendors? And if you are working there, what happens if you decide not to buy, and suddenly disappear? What will the Owner tell the employees, clients and vendors? And if you make up a story to tell everyone - so that you don't tip your hand that the business is for sale - then you actually buy the business, what does that do to your credability, particularly with employees? How can they believe whatever you tell them, in the future? Because safeguarding the confidentiality of the sale, the Seller's relationships with those people mentioned above and your future relationships with them is normally (but not always) the key, and it is these issuee that will need to be addressed, if you work in the business, prior to settlement. When such a situation occurs, it is normally in retail, or a similar business where a lot of cash is going unreported, and the only issue to be answered is whether the cash the Seller is TELLING YOU VERBALLY is actually being transacted. When that is done, the Buyer normally puts in a solid contract that says something like, "If the Seller demonstrates that $X per day are being transacted for the seven days I will be observance, I will buy at $Y..." And the Contract will normally include a non-refundable, sizeable check. The point is that the Seller does not want someone in there that will become involved, potentially screw up his confidentiality, and walk away without a thought, leaving him to clean it all up. The Seller expects you to do your due diligence about all other issues yourself, before intruding in his business. THERE ARE EXCEPTIONS, but to understand that, I would need to understand what you are looking for. If you want to talk further, call me at 410-715-0700.

Apr 20, 2009

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