Sellers & Buyers of Businesses

Essential Meeting Tips for Sellers & Buyers of Businesses

The buyer-seller meeting is frequently a “make or break” opportunity. Your Business Broker or M&A Advisor will do everything in their power to make this meeting a success.

It’s critical to remember that offers are rarely made before buyers and sellers meet in person. Following this crucial meeting, the all-important offer is usually made. As a result, you want to make meetings as productive and positive as possible.

Buyers should be aware of how the process of selling a business works and what they can expect from it. Buyers should also take the time to explain their background and financial capabilities to the seller, as this is critical to the seller’s success. Many buyers jump right into business questions without first discussing their qualifications. Sellers will be more willing to share information and provide better terms as they become more comfortable with buyers and establish a rapport. Buyers should also be aware that following their broker’s recommendations will increase their chances of a successful transaction.

During the meeting, sellers should be prepared to be honest and transparent. They also want to avoid saying or doing anything that could be perceived as a strong-armed sales tactic.

Especially in this environment, buyers are extremely cautious. Buyers are vetting sellers and information on the business in the same way that sellers are assessing buyers.  Buyers want to be sure that the business is a safe investment and has “transferable value,” and they are unlikely to consider or proceed with purchasing a business unless they are confident that the company’s revenue and, more importantly, cash flow will continue in the future.

Asking the Right Questions

Make sure the questions you ask are relevant and logical if you’re a buyer and meeting the business owner for the first time. It’s crucial for buyers to put themselves in the other party’s shoes. Buyers should also arrive at the buyer-seller meeting having completed their homework, so make sure to plan ahead of time so that you’re prepared to ask good questions that demonstrate your knowledge of the industry.

Building a Good Relationship

Of course, buyers should plan to be courteous and respectful. They should also be prepared to avoid topics such as politics and religion, which can often lead to conflict. When sellers dislike potential buyers, there’s a good chance they won’t put their trust in them. For the majority of sellers, their business is a legacy. It frequently represents years, if not decades, of hard work. Sellers, understandably, place a high value on their businesses. Many people will feel as if it reflects them personally in some way. When dealing with sellers, buyers should keep these facts in mind.

Sellers Should Be Honest

Sellers play an important role in the process as well. While it is true that sellers want to sell their company, they do not want to appear to be salespeople. Rather, sellers should strive to be as genuine and truthful as possible.

Every business faces some level of competition, so sellers should keep this in mind and not pretend that it doesn’t exist. If the seller acts like there is no competition at all, a savvy buyer will be skeptical, to say the least. So sellers should go into meetings with a clear understanding of the competitive marketplace and have a strong response as to why their business is a leader.

Business Brokers and M&A Advisors must work with their buyers and sellers well ahead of time to ensure that both sides understand what is expected of them and how to best approach the buyer-seller meeting. Your chances of success will increase with the right preparation.

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