The Rhythm of the Deal

Business Buy a Business Sell a Business

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So much in our lives follows a natural rhythm – breathing, heart beating, asleep/awake, the rising and setting of the sun, the ocean tides, music.  These rhythms are comforting – necessary even.  They help us keep track of time.  Occasionally they go completely wrong:  We get short of breath, our hearts race or skip beats, we can’t sleep, there’s daylight saving time and tsunami and we can’t dance any more.  These breaks in the rhythms are awful and sometimes deadly.

Business deals also have a natural rhythm, not unlike a dance, but too many people interrupt that rhythm and then wonder why their deal fell apart.

Whether you’re buying a $100,000 coffee shop or a $10 million manufacturing company, the deal has a flow to it. First comes the expression of interest, followed by a non-disclosure agreement. Next comes a more formal statement of interest, followed by due diligence. Financing and legal documents come next, followed by a closing.  For small deals, this might take some 60 days from beginning to end.  For bigger deals, it might take 4-6 months, but the order remains the same and when interrupted, it takes too much time to regain the rhythm and the deal dies.

So how do you find your business brokerage rhythm?  Your business broker is your band leader, keeping time so you can focus on your tasks at hand.  Don’t casually let advisors, bankers, or family members cause delays; a deal requires both compromise and decision.  We’ve worked with buyers that have said, “I take a long time to make decisions – I won’t be rushed.”  That’s fine when you’re buying a car or a pair of shoes, but rarely works when buying a business.  That buyer likely won’t complete a deal because a motivated seller is itching to move on and there may be other buyers making offers.  I’ve also had sellers that wanted to take a week to think about an offer – the buyer likely won’t be there when they emerge from their deliberations because they don’t want a business run by someone who likes slamming on the brakes at the last minute.

Whether you are the one initiating the conversation or someone approaches you about buying your business – get a business broker involved right away to make sure you have a smooth and timely transaction. Contact us when you’re ready to talk.