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Screen and Be Screened
The next phase involves actual meetings with prospects. During this phase you need to screen buyers just as they are screening your business. Make a judgment as to which prospects are "serious" and which have the money (or the means to get the money). Unfortunately there may be several tire kickers and several prospects of good intention but no money. There may even be a few people who want to learn about your business to learn how to start their own or to learn how to compete with you more effectively.
There are several things to look for when screening prospects.
- - What type of buyer are they? (discussed in Section XX)
- - Is the buyer financially qualified?
- - Has the buyer successfully closed transactions previously?
- - Has the buyer run a business before?
- - How well does the buyer understand the industry?
You need to use your judgment and to rely on the judgment of your business broker if you are using one. It is good practice to get some money down as soon as possible. Even a check for a thousand dollars, with contingencies that give the buyer a way out with full refund, can show that a prospect is serious.