By Anthony Cullins
Seven (7) years ago, The Vant Group represented a seller who was anxious to sell his business so he could enjoy the fruits of his labor.
Like most sellers, he had a number in mind that he wanted for the business and was not too keen on the deal structure so long as the purchase price matched the desired asking price. We were able to secure a buyer who offered the seller the number he wanted, however, it included a significant amount of seller-financing. Despite our urging for the seller to consider slightly lower offers with more guaranteed upfront, the seller decided to take the higher seller financed offer.
Everything was going great for the first few months. Then about six (6) payments in, the payments stop, and the buyer goes into default. The TVG client spent eight (8) months and over $100,000 in litigation costs to resume control of his business, which by then revenue was down 50%.
The TVG client worked hard to re-establish his business and slowly built the business back with revenue and cash flow stronger than before. TVG successfully helped the client sell the business again (with very little seller note).
- Price is one thing but the terms are another. You have to balance both.
- Trust your gut in judging the character of a potential buyer.
- Chose a business broker with care and listen to their advice.