I have a small manufacturing business listed for sale. In the last month I've gotten maybe eight inquiries. Every single one asks for revenue, profit margins, customer concentration, the works. I send them a summary. Then they want a call. Then they want to "explore synergies." And then nothing. Or they ask if I'd consider seller financing with 5% down. One guy asked if I'd take a "small equity stake" in his startup as part of the deal. I'm not desperate here. Is this just how it is? Do people not understand that buying a business requires capital? I'm seriously considering requiring proof of funds before I even reply to the next email.
Buyer Screening
Why do people keep messaging me with no money?
Proof of funds upfront will kill 90% of your inquiries but the 10% left will be real. I started doing it after wasting three months on a guy who turned out to be a "business coach" fishing for free consulting.
I think some of it is just the sheer number of "how to buy a business with no money" videos and courses out there now. People watch a 20-minute video and think they're ready to acquire. They don't realize that even SBA looans require a down payment and a personal guarantee.
Seller financing with 5% down is not crazy in some industries. I bought a service business with 10% down and a three-year earnout. But I had already run a similar company for a decade. The problem is the people who ask for it without any operating history or collateral.
Most of them have no money because they have no plan. They see a listing, get excited, and start asking questions before they've talked to a lender or even looked at their own bank account. A simple one-page buyer pre-qualification form will filter a lot of this out.
The "explore synergies" line is usually code for "I want to pick your brain for free." I've learned to ask what their timeline is and what their funding source looks like in the first reply. If they dodge those two questions, I stop responding.
Can I ask what youre using to list it? I had a similar experience on one of the big marketplaces. Moved to a broker who vets buyers and the quality of inquiries went up immediately. Cost me a commission but saved me months of nonsense.
Also worth checking whether your listing makes it clear that the business is not a startup or a franchise opportunity. If the ad reads too general, you'll get people who are just browsing.
I don't think it's malicious most of the time. A lot of these people genuinely believe they can figure it out. They've been told that business owners are desperate and will take any offer. It's a numbers game for them. They message 50 sellers and hope one says yes.
The startup equity guy takes the prize. I had one offer me "sweat equity" in exchange for taking over my business. I asked him what he would be sweating, exactly. He didn't have an answer.
The pre-qualification form idea is interesting. I'm going to draft one tonight. The broker route is tempting but I'm not sure I'm ready to give up 8-10% yet. The last guy who asked about seller financing actually had a decent background, so I'm not ruling everyone out. But I'm done sending full financials to anyone who hasn't shown me a bank statement or a lender pre-approval.