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.
Red flag? not really, lots of owners are worried that their staff is going to exodus if they think new owners are taking over…
That being said, especially for smaller businesses, employee turn over is going to be one of your bigger risks… buying a business and having half the staff quit in the first 3 months can easily mean all the value in the business is gone… It’s a good idea to write up your terms/contract with that in mind so you don’t pay a bunch of money for a lemon.