The life blood for a business broker is obtaining a new listing. It is the beginning of a
lengthly process that includes preparing the business profile, writing and publishing
advertising on various business for sale websites, interviewing buyer prospects,
conducting inverviews between buyers and the seller, assisting the buyer through the
due diligence process, obtaining a lease assignment, arranging financing, and perhaps
coordinating with a franchisor. We do all of this for the most part on a contingent fee
process. However, there are many reasons why a client relationship might fall apart.
Knowing when to cancel the listing and walk away is important to avoid loss of further
time and money on a project that is likely never going to happen.
Sometimes the problem with a client starts with incorrectly taking the listing in the
first place. In the excitement of obtaining a new listing a business broker may overlook
important issues such as proper valuation of the business, fully uderstanding the reasons
the client wants to sell, agreeing to take a short listing period, not obtaiing critical
documents that will be needed for the buyer’s due diligence process, or not properly
communication with the seller’s accounant and attorney who may be giving the client
advice in conflect with your process of selling a business.
Once the listing is obtained, the following issues are red flags for problems ahead and anyone
of which could cause a transaction not to happen.
•
Shortly after taking the listing, the client decides that the asking price needs to be
increased and/or the terms of sale need to be changed.
•
The client promises, but never provides the requested documents such as tax returns,
copy of the property lease, and/or list of assets to be included in the sale.
•
The client monopolizes your time calling, texting, and/or emailing a barrage of messages
with constant request for information, status reports, or just wanting to talk.