Selling my business???

[jms920]

I am trying to sell my small retail store. I advertised on Craigs list and had a person contact me. We've corresponded a few times. He is interested in coming to see the store. Now I'm nervous. I have never sold a business before and don't know how to proceed from here. Any help or suggestions?

Thanks in advance
JoAnn

 

[thomas998]

It is not that complicated if you are the sole owner of the store. You can really look at it like trying to sell a house with all the furniture included...

Now the buyer will likely want to see more than just the store with whatever stuff you have inside... if he is intending to continue the store he would want to see the financials to determine what the store is worth.... frankly my first thought is that a person you found off craigslist could be trying to scam you so be careful.

If you do go through and sell to someone make sure you transfer over everything and get your name off anything that might make you liable for things after the sale... in other words don't leave your name on anything saying you are responsible for payment of stuff from your supplier because then the new owner could order a whole lot of stuff, take it, skip town and you would be liable for it. If you aren't sure how to get everything done I would suggest you get a lawyer to draw up the proper documents.

 

[jms920]

The it's craigs list thing I'm very nervous about I think. How can I tell if it's a scammer. Anything to watch for. How do I know he is legit?

My business is an s- corp. I plan to use a lawyer. No way would I do this alone, I am not knowledgeable enough of the laws and documents.

 

[Muushka]

We looked into buying a small business 2 years ago. The owner was reluctant to give us the financial information. It was like pulling teeth. It should have taken a week or so between the time we started inquiring and when we decided not to do it and it ended up taking a month.

Let them do their due diligence. I really don't remember seeing anything on his reports that anyone could have done any scamming. Good luck!

PS I was nervous on this end of it so I did a little background checking on the owner. He was who he said he was, checked the phone number with the address and did a real estate search to veryify his address. Sounds silly, but it made me feel better.

 

[scrapquitler]

We looked into buying a small business 2 years ago. The owner was reluctant to give us the financial information. It was like pulling teeth. It should have taken a week or so between the time we started inquiring and when we decided not to do it and it ended up taking a month.

Let them do their due diligence. I really don't remember seeing anything on his reports that anyone could have done any scamming. Good luck!

PS I was nervous on this end of it so I did a little background checking on the owner. He was who he said he was, checked the phone number with the address and did a real estate search to veryify his address. Sounds silly, but it made me feel better.

I would suggest paying a fee to a laywer to look over the paperwork before you complete the sale.

 

[jms920]

I definitely plan to have a lawyer draw up any paperwork for me.

How would a scammer with a situation like this?

 

[jms920]

We looked into buying a small business 2 years ago. The owner was reluctant to give us the financial information. It was like pulling teeth. It should have taken a week or so between the time we started inquiring and when we decided not to do it and it ended up taking a month.

Let them do their due diligence. I really don't remember seeing anything on his reports that anyone could have done any scamming. Good luck!

PS I was nervous on this end of it so I did a little background checking on the owner. He was who he said he was, checked the phone number with the address and did a real estate search to veryify his address. Sounds silly, but it made me feel better.

I can certainly understand that. As the owner I've had some inquiries that immediately asked for financial info. Which I prefer not to divulge until a face to face meeting. I can understand them wanting this info but in turn it is private info I don't feel comfortable giving out to a faceless computer LOL.

JoAnn

 

[thomas998]

If I was going to buy your business I would want to see the tax returns from the past few years to verify how much business was actually being done... now if I'm a scammer I would do that same thing so that when I had those documents I could get your SS number and other information to steal your identity... so just to protect yourself before you give him the tax returns make copies of them and black out things like your SS number that don't really matter at this point.

 

[Muushka]

I would suggest paying a fee to a laywer to look over the paperwork before you complete the sale.

Like I said, this was 2 years ago and we decided not to buy it. It did not get to the lawyer phase.
My neighbor, a CPA checked out the financials and advised against it.

I can certainly understand that. As the owner I've had some inquiries that immediately asked for financial info. Which I prefer not to divulge until a face to face meeting. I can understand them wanting this info but in turn it is private info I don't feel comfortable giving out to a faceless computer LOL.

JoAnn

I'm not the OP. All of our dealings with this owner were face to face. Started out with a friendly discussion at the store.
Then coffee.
Then arm twisting for the financial stuff!

If I was going to buy your business I would want to see the tax returns from the past few years to verify how much business was actually being done... now if I'm a scammer I would do that same thing so that when I had those documents I could get your SS number and other information to steal your identity... so just to protect yourself before you give him the tax returns make copies of them and black out things like your SS number that don't really matter at this point.

This is what we asked for. After reading the tax returns, and my neighbor going over them, we decided it was not a good investment.

He also had us sign something that the info we had (not his SSN, that was not visible) was private and would not be shared.
I thought this was a little strange, but we signed it.

 

[jms920]

Thomas, very good point! I thank you for the heads up. Being an honest person, I have no clue what a scammer would have been after.

I appreciate ever bit of info and thank you all very much.

JoAnn

 

[jms920]

Thank you also Muushka!

 

[canadianjovigirl]

When we sold our business we did not show financials etc on our own, that was done at a meeting at the lawyers office................and they were documents prepared by our accountant. Just didnt want that info out there to nosy people. And yes we had the disclosure document as well to try to prevent that info from getting out to the public.

Must have done something right as it sold to the first person who inquired about it and was fairly quick and painless for us thankfully.

 

[jms920]

Thanks, I pray that mine can be quick and painless.

JoAnn

 

[thomas998]

Non-disclosure agreements are common... In this instance the OP wouldn't be signing one she would be asking the person that wanted to see the financials to sign one. Anyone that balks at signing a non-disclosure agreement before doing the due diligence on the company is either a scammer or doesn't know what they are doing... in either case don't deal with the person that wont sign it, if the are so clueless as to not understand it will just be a pain in the backside further down the road.

 

[DisneyFairytale]

I would suggest paying a fee to a laywer to look over the paperwork before you complete the sale.

Very good advice. Here in Alberta-CA you cannot buy/or sell a property without going through a lawyer.

 

[mjhd]

I would ask them to sign a nondisclosure and would not even have given him the name of the store until he provided proof of ability to purchase (i.e. does he have the $ or can he get financed). Only then would I proceed.

 

[jms920]

I would ask them to sign a nondisclosure and would not even have given him the name of the store until he provided proof of ability to purchase (i.e. does he have the $ or can he get financed). Only then would I proceed.

In what form would I expect proof of ability to purchase? This is a very good point.

 

[WheelCEO]

I've bought and sold quite a few businesses... not sure on the size of your business, but I always hire a business broker, that's what they get paid for; to handle my headaches

 

[Evi]

I would ask them to sign a nondisclosure and would not even have given him the name of the store until he provided proof of ability to purchase (i.e. does he have the $ or can he get financed). Only then would I proceed.

I agree with the above. Speak with your lawyer prior to showing any paperwork with this person. you can let them see the shop, but if your concerned make sure someone else you trust is also present. Just don't give them hard numbers until you've done the above.

 

[jms920]

I agree with the above. Speak with your lawyer prior to showing any paperwork with this person. you can let them see the shop, but if your concerned make sure someone else you trust is also present. Just don't give them hard numbers until you've done the above.

Thank you. My plan is to have 2 others present. I will speak with a lawyer today. Thank you!

JoAnn