We love to tell real world stories about what happens when buyers and sellers come together to try and do a deal. Recently, an owner agreed to finance 50% of the purchase price of their business. As the due diligence process began, the type of questions that the buyer was asking became a red flag for the seller. The process was also getting bogged down by the buyer not responding in a timely manner. The buyer wouldn’t answer what we would consider normal, everyday conversational questions some of which had to do with moving his family to town to run the business.
This caused the seller to start to doubt that the buyer was going to pay back the loan, run the business properly and take care of the employees. The seller was thinking: "If you are acting this way with me, my key people aren’t going to be able to work with you and will leave. If the key people leave, the business will fail and you won’t be able to pay back the loan".
The lesson here is that character and being responsive are incredible factors that come into play when a deal is being discussed. Remember to put yourself in the other person's shoes for a moment. Negotiations could go your way more often.
