Not every buyer who shows interest in your business is worth your time.
Some will come prepared and aligned with your vision.
Others may overpromise, underdeliver, or waste months of momentum with vague offers and missed deadlines.
That’s why one of the most important steps in a sale is qualifying buyers early.
This week’s newsletter breaks down what to look for when separating serious contenders from risky ones:
- 3 qualifying traits with green and red flags to watch for
- 2 frameworks to help you filter buyers
- 1 action step to get started this week
3 Qualifying Traits Every Seller Should Watch
1. Strategic Fit
Green Flag: The buyer can clearly articulate why your business complements theirs. They talk about synergies, market expansion, or capabilities. This shows they’ve done their homework and see long-term value beyond the transaction.
Red Flag: The buyer floats unrealistic valuation expectations, either lowballing to test the floor or dangling an inflated number they don’t intend to honor. Both are signs of misalignment and can waste your time.
2. Financial Capacity
Green Flag: The buyer has strong financial backing. Whether through cash on hand, financing already lined up, or committed funds, they can demonstrate their ability to close without delays.
Red Flag: The deal relies too heavily on debt. Over-leverage raises the risk of collapse during financing.
3. Communication & Process
Green Flag: The buyer engages with transparent communication. They ask thoughtful questions, explain their process, and are upfront about timelines and deal structure.
Red Flag: The process feels slow or disorganized. This might include missed deadlines, vague answers, or unclear decision-making chains.
2 Frameworks to Qualify Buyers
The Red Flag Checklist & Green Flag Signals
Qualifying buyers starts with knowing what to look for. A structured checklist makes it easier to separate serious buyers from those who could derail your process.
Green flags include things like committed capital, clear strategic rationale, and responsive communication. These are the signs of a buyer who is prepared and aligned.
On the other hand, red flags often show up as vague funding sources, unrealistic valuation expectations, or disorganized processes. When you see too many of these, it’s best to move on quickly.
Having a simple checklist turns buyer qualification from a gut-feel exercise into a disciplined process.
Deal Makers and Deal Breakers
For some buyers a single factor may be enough to make or break a deal. There is nothing wrong with this. What you value in a seller will be dependent on your preferences.
Deal makers: Refer to specific “green flags” that you value more than others. You can give these extra weight when evaluating who to sell to.
Deal breakers: This refers to any specific “red flag” that makes the seller an automatic “no” for you.
Deal makers and deal breakers signal what you truly value in an exit. They make it easier to eliminate obvious bad-fits and allow you to make a more aligned choice.
List Of Our Completed Transactions
1 Action Item This Week
Create a buyer checklist.
Write down the red and green flags you want to watch for.
Having this list on paper keeps emotions in check and helps you qualify buyers.