Let the Seller beware

My company has been approached by a larger business, which wanted to purchase my business as a going concern. They have offered a good price, but I’ve since heard rumours about how they cut corners in the business and I am also concerned that they might struggle to find the purchase price. If these reports are true I’d rather not enter negotiations. I don’t want to alienate them or accuse them of anything. How can I find out more before deciding whether or not to sell?

Ask them for more detail, such as confirmation from their bankers or accountants that they have access to sufficient funds.

If you expect to continue working in the business after it is sold, this will impact on how much “cutting corners” in the future will matter to you. You should try to spend time with the buyers to agree a common “vision”, and you could insist that the sale contract contains certain guarantees, including perhaps that an agreed business plan will be adequately resourced.

You may even seek appointment to the board of directors to ensure that your views are heard.