As a full time business intermediary selling Triangle small businesses I facilitate a LOT of buyer/seller meetings. With my process, a buyer/seller meeting is what happens after a buyer has shown interest in a listed business, signed a Non-Disclosure Agreement, passed my interview, and proven funds to have the capacity to consummate the sale.
At this stage, the buyer is interested, but wants to meet the man or woman running the business. The buyer/seller meeting is the buyer’s chance to interview the seller, because unlike real estate, business sales are very much about the people behind the numbers…
The results of this meeting will likely make the difference between a great offer or a “no thanks!”
So without further ado, let’s discuss some strategies to “win” the buyer/seller meeting.
- When I run my buyer/seller meetings I ensure that both parties know that there is really just one rule; the buyer is not allow attempt to negotiate on price. The seller should feel confident that they won’t be put on the spot to answer “what’s your lowest price,” or similar aggressive questions. As a broker I simply won’t allow it. If you’re in a situation where you’re asked to defend your price, let the buyer know that the buyer/seller meeting is the buyer’s chance to get the answers they need to make an informed offer, and that the business is worth more than the selling price.
- The buyer/seller meeting is all about business, but it’s also the time to get to know the buyer. Depending on the deal structure, you may have a range of time to work with the buyer, so you want to listen to their questions carefully and try to understand their true motivations to buy your business. Ask yourself if they could be successful in your role, if you could work with them through the transition, and if you think they are honest and worth working with. Deals take a long time, be confident you can work with this person.
- Answer questions factually, but try not to over-answer. By that I mean don’t share constraints that you’ve felt in running your business. The buyer is excited about the opportunity of running your business, so listen for what they are excited about and highlight those opportunities. I’ve seen sellers introduce negative elements about their business that buyers were not thinking about. It may be the case that these issues were never a concern and wouldn’t be a problem for the buyer as they are for the seller. In my experience buyer prospects are concerned, but about different things than sellers are focused on. Never tell a buyer that they can’t do something with your business because you never know what’s possible! Sounds crazy but I’ve seen this happen multiple times…
- Feel free to highlight revenue producing aspects of the business that you have not yet developed; where you think opportunities of the business are. Keep it positive, and the best reasons why you haven’t executed on these are those which affect you but not the buyer. Ex: I’d would take the business online, but I don’t have the technology skills… (Assuming this buyer is technologically savvy).
- The buyer/seller meeting is the time to share details of your business that are not captured in the marketing collateral. As a broker I’m very careful not to make future representation in printed marketing materials as this could be a liability if the business doesn’t perform. However verbal representations, if true, are a great way to stoke the expectations of a buyer and validate the reasons why he or she is purchasing your business. The buyer/seller meeting is a great time to share how much the business can make under the buyer’s ownership!
In my opinion there is one thing that needs to happen to ensure that the seller “wins” the buyer/seller meeting: The buyer needs to leave excited about the potential of the business, but they also need to understand why the seller is selling AND believe that those reasons won’t affect him or her.
If you’re represented by a great broker, that broker will get loads of information from the buyer immediately after the buyer/seller meeting. Chances are the buyer will be fairly concrete in his or her decision at the end of that meeting, so the debriefing after the buyer/seller meeting is very important, and listening for if any further information needed is also critical to help overcome objections that may persist to getting the offer.
If you’re nervous about your buyer/seller meeting, just remember that buyers are people too, and while these meetings normally start out cold and strange, by the end everybody kind of “gets” where everyone else is. Buyer/Seller meetings can be fun if they are facilitated well and both parties are open and honest. So relax and have fun, you’re going to “win” your buyer/seller meeting!