First in a multi-part series on due diligence.
When selling your business …. know your buyer.
Even in the rare instance of an all cash deal it is a good idea to do a background check on a potential buyer. They’ll be getting your employees, customers and the good name you’ve built in your industry. Background checks are very inexpensive relative to the transaction price. Simply asking a buyer for information to perform a background check will tell you something… if the buyer opposes a background check you know something!
When you sell a business and close the transaction the deal is not over. There is a transition period when you’ll be working with the new owner and you’ll have to explain to customers, vendors, etc why you chose to sell to this person.
Choose your buyer as carefully as the buyer chooses your business!