THE PROBLEM WITH POTENTIAL BUYERS OF BUSINESSES
Too many potential buyers of small and midsize businesses do not know what is fair and reasonable during their interaction with business sellers, business brokers and M&A intermediaries, professional service providers, sources of financing and other people and organizations they encounter during the buyers’ process to locate and purchase worthwhile businesses for sale.
Uninformed potential buyers unnecessarily frustrate and complicate themselves and their relationships with the people and organizations they need the most, upon which buyers must rely to buy the right business the right way.
Bill of Rights for Buyers of Small and Midsize Businesses . . .
The intent of the Bill of Rights is to be perceived positively. It can be a useful educational communication for everyone on the playing field of dealmakers who seek mutual benefits.
People and companies thinking about business mergers or acquisitions can be more comfortable if they know the characteristics of the players and the boundaries of the playing field upon which dealmaking occurs.
Think “Gentlemen’s Agreement,” which is backed only by the integrity of the people, companies or organizations involved in a business transaction, to faithfully abide by the terms of the agreement, the basis of which is mutual respect and honorable behavior.
Despite not being legally binding, in these days of the Internet anyone feeling abused can try to make their case online.
Unrealistic expectations of inexperienced or insufficiently informed potential business buyers plus their general distrust of people who facilitate the buying of small and midsize businesses unnecessarily impede the opportunity for dealmakers and intermediaries, for buyers and sellers and their professional advisors and for sources of financing.
A credible “Bill of Rights for Buyers of Small and Midsize Businesses” can help potential buyers know what to expect. It can provide guidelines for sellers, business brokers, M&A intermediaries and business acquisition advisors.
Few business buyers know what should be their fair and reasonable individual rights. Many dealmakers, intermediaries and advisors work from a Code of Ethics, but without translation and presentation in a “Bill of Rights for Business Buyers” too many buyers feel like they are flying blind.
Buyers who do not know the “rules of the game” of business buying flay themselves all over and outside of the business acquisition playing field.
Buyers, who lack specific expectations about the process to find a worthwhile business for sale, or how to buy the right business the right way, waste too much time worrying about potential abuse. Buyers’ fear clouds the reputation of the dealmaking industry.
Some of us take those “rules of the game” for granted; we do not write them down or publicly show them. How can inexperienced or insufficiently informed buyers know the “rules” (i.e., best practices, reasonable expectations), and the abuses to watch out for if buyers do not know what those “rules” are?
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Ted J. Leverette
The Original Business Buyer Advocate ®
“Partner” On-Call Network, LLC