Seller Red Flags

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January 18, 2020

by a searcher from Washington and Lee University in Cambridge, MA, USA

What red flags have y'all learned to pay attention to when sourcing deals?

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commentor profile
Reply by a searcher
from Harvard University in Omaha, NE, USA
You can't compartmentalize dishonesty or fraud. If you find it in one area, it likely exists elsewhere.
commentor profile
Reply by an investor
in White Plains, NY, USA
I agree with Bruce. There are many!

Stephen Covey writes "seek first to understand".

Don’t cut the “seek first to understand” process short!

Ask if he is really ready to sell his BABY.

Ask WHAT he plans to do in retirement.

Ask WHEN he decided to sell his business. His answer will tell you whether or not his decision was based on a thoughtful, planned exit or if he is selling due to other pressures; bad market conditions, the business is failing, poor health, impending divorce, new competition.

Ask HOW QUICKLY he wants to sell his business.

Ask WHERE he intends to retire.

Ask if he has built enough WEALTH to live the way he wishes during retirement.

The answers to these questions will help you expose red flags.
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