Business sales process can be a bumpy and very long process. Although we may obtain a flurry of interests from various investors, most of them may not be worthy of our precious times. There are many window shoppers who would only waste our time. It’s difficult enough to maintain the smooth process of our business to ensure good pricing, it also takes a lot of energy and time to sell our business. We would have our hands full, once the negotiation process is started. In this case, it is important to define prospective investors early on. Replying emails, taking phone calls and meetings could steal our time, if the investor isn’t actually interested to buy our company. The first thing that we should know is why the investor wants to buy our business. This will give us a good idea of the investor’s thinking process and overall process. Any resistance, pause and delay in answering this question could  cause a rise of concern. If the investor refuses to answer, it is likely that we are wasting our time. It’s likely the investor is only window shopping for future purchase, with undetermined time frame.

After we know that the investor seems to have a genuine interest, it is important to know about their present circumstances. Even if they are interested, it is likely that they don’t have the financial resources and expertise in running our business. However, it is important for us to keep an open mind and it is still likely that we would judge people unfairly. Running a business requires a defined qualification, experience and skill. It is a good idea to ask the investor, what kind of businesses that have approached in the past. This will clarify whether we match the category. If the investor is approaching a narrow type of business, it is likely that he is quite focused on specific type of business. This further clarifies whether the investor is really likely interested in our business. The more question we ask, the more likely that we would get better understanding. We could also ask what the investor would do to our present employees after the business is acquired. This could allow us to gauge the commitment in running our business, more or less in its present state.

The investor is also likely to purchase our business, if he has an actual experience in our industry. If the investor lacks experience, it is possible the he is only windows shopping. Experienced investors would clearly know that they won’t be able to learn the ropes as they are operating a business in unfamiliar industry. Experienced investors will likely buy our company. Also, there’s a possibility that the so-called investor doesn’t really have the financial ability to fund the purchase. It’s a serious stumbling block, especially if the investor is only windows shopping. The investor may promise that a bank will support him, but any kind of business process would be scrutinized by banks, which will further lengthen the acquisition process. Once we ask about the financial resources of the investor, his eyes may start to wander around the room and he becomes disinterested.