We are in the 11th hour of purchasing a small business. Throughout the due diligence process the seller has been hyper-paranoid about his employees (whom are in their 60s and 70s) catching wind of the sale, so we have had to access the property only after business hours. Even after the Purchase Agreement has been signed he is STILL very squirrely about his employees finding out. (1) is this normal? (2) any obvious red flags?
Note: seller is hands-off and remote. Employees operate the day-to-day.
I went through the exact same situation. Imo, somewhat of a red flag.
In my situation, the seller had 2 sets of books and withheld other critical info that his staff was aware of. His staff hated him, despite he never came to work during the day.
When the sale was completed, he called a quick meeting and introduced me as an “investor/partner”. I pulled him aside and said WTF?! The seller was committed to a 2 week/80 hour transition. That same day was his last day.
I would ask your seller, literally, “why is this a secret to your staff?”
You can throw the seller a curve ball and require a staff meeting between you and his staff. (he can intro you as potential investor. If the sale goes through, you simply stated your investment became 100%).
I’d want to read the staff’s body language, ask a few what they do, what they like about it, what they’d change.
Sounds like a ridiculously crazy approach but if the seller has nothing to hide and wants to get out, he may go for it.