Closing the deal is the final and most exciting step of all.
After all the negotiations and trawling through so much documentation, you’re nearly ready to get the keys to your new premises.
But there can be last-minute hitches. Rarely, the deal can even collapse just when a deal seemed close.
So how do you prevent the deal from slipping through your fingers – and is it ever wise to walk away at such an advanced stage?
Bringing it all together
There are a few things to remember as you try to
Set a firm time period
There is nothing more frustrating than a deal that drags on for months on end.
Make it clear to the seller that you would like to
Keep things moving forward
Unless there is a reasonable explanation for any delay, don’t let the process stall. Never think you’re being too pushy by reminding the buyer of an impending deadline.
Keep building trust
Don’t do anything to damage the trust you’ve built throughout the process. Until the final contract is signed, the seller can still back out.
Think before you speak
By this point, you are probably well acquainted with the seller – but keep things professional and follow best practice, under the instruction of any advisers you’ve appointed.
Don’t be afraid to ask questions
By now, you may feel like you’ve asked so many questions that there can’t possibly be anything left to ask. But if you have any doubts at all, don’t be afraid to ask for clarification on any issue, big or small – buying a business is too big a commitment not to.
Look out for warning signs
Until the final sale agreement is signed, you should always be prepared to walk away – no matter how many months you’ve invested in the process, and however much you’ve set your heart on the business.
If something doesn’t smell right, then you should at least reconsider your commitment to proceed.
Here are some due diligence problems that should prompt a rethink:
The finances aren’t adding up
Make sure your accountant checks, double checks
The seller isn’t willing to renegotiate
The seller isn’t willing to compromise on the price and other terms despite due diligence having uncovered some serious, hitherto undeclared problems.
Something just doesn’t feel right
Sometimes our gut instinct tells us something isn’t right. If something feels off, even if you can’t pinpoint it, you’re not obliged to close the deal – however much that might infuriate the vendor.
If things proceed smoothly, your solicitor or broker can help you
This article is part of a step-by-step series about how to buy a business.
The first step is: What Industry Should I Buy a Business In?