First impressions count. Whether you’re a prospective buyer or a hopeful seller, the initial meeting is very important as it will set the tone of your negotiations. As experienced business brokers, we place great value on preparing our clients on knowing how to successfully navigate their way in this introductory encounter. We coach them on expression and conduct as well as optimism and the best way to present their proposal whether they are the seller or the buyer. Mergers and acquisitions can be complex. However, there is an etiquette that can help smooth out the process. Let’s take a look at things you can do before, during, and after the initial meeting.
What to do before the introductory meeting
“We should remember that good fortune often happens when opportunity meets with preparation,” says the great businessman and inventor Thomas A. Edison. And indeed, thorough preparation done prior to the initial meeting will lay a foundation upon which successful negotiations can be held. The first port of call is to choose a reputable business broker.
1. How to choose a business broker
Because of their inherently compound nature, mergers and acquisitions typically involve a host of professionals including business brokers. What criteria should you use to select such a team? We recommend you look for experience, an excellent reputation, trustworthiness, and a good M&A track record.
2. Prepare your company papers
Your business brokers will offer advisory services encompassing the legal preparation that you must do. You’ll be instructed on auditing your finances, business valuation, and documents that must be ready to present buyers during the due diligence process.
3. Get yourself emotionally ready
Selling a business or acquiring a business is no walk in the park. You need to be emotionally ready. Studies liken the sentiments felt by sellers when their business is bought to the loss of a child. Grief may accompany the sale. This is why it is imperative to have an M&A firm that can broker deals impartially on your behalf. In addition, they’ll teach you what to say and not say during the meeting.
4. Prepare answers ahead of time
Your advisory team will give you a set of questions to anticipate so you can adequately prepare how you will answer them. If you’re keen to see what sort of questions may be posed by buyers, you’ll be happy to read through this series of questions compiled by the New York Association of Business Brokers.
What to do during the initial meeting
Preparation will put you at ease and help you to discuss the business at length and answer questions in a poised manner. A neutral setting should be chosen for this initial meeting. Ideally, a business lunch would be preferable. This informal setting gives you the chance to relax as you get to know each other. What do you talk about during the meeting?
1. Find common ground first
As you get to know the buyer or seller, ask probing questions that will shed light on why they are selling or why they wish to buy. Knowing their hopes, goals, and objectives can assist you in tailoring your own pitch. After finding common ground, work from this place to establish mutual value and growth opportunities.
2. Tour the business together
After your lunch date, you may wish to give a tour of the facility or offices. However, this should all be done as surreptitiously as possible so as to not alarm employees. The last thing you wish to do is have staff leaving just as you are about to sell the business.
3. Don’t be afraid to ask questions
Whether you’re the buyer or seller, ask as many questions as you can. It’s key to mention here that sometimes comments may be made that can seem offensive. Don’t take them personally. Don’t get emotional. Try to answer objectively. If you don’t know the answer, tell the truth, and say you will get back to them with an answer. Lying about something will backfire when the buyer begins due diligence.
What to do after the introductory meeting
After the meeting, the main discussions will be between the brokers. You’ll be consulted from time to time and updated on the development of things.
1. Schedule follow up meetings
Your brokers will do the follow-up meetings, and provide the buyers with any requested documents on your behalf. From this point until a Letter of Intent is signed you just have to be patient.
2. Continue managing the business
Now is not the time to slacken as you wait for the buyers to make a decision. You should begin looking at developing effective succession planning strategies. The future of the business and your employees depends on the steps you take now. If it’s a merger, you’ll want to think about how to effectively manage the culture aspects of the merger.
3. Assist as and where you can
After signing the Letter of Intent, it’s vital that you help the buyer with the necessary paperwork they need to complete their due diligence. The sooner you can provide the papers, the sooner your buyer can make up their mind whether to proceed to draft a Purchase Agreement or not.
Get the help you need from professional brokers
You don’t have to go through a business acquisition or sell a business all by yourself. Teams such as ours are ready to work with you through the transaction. Our advisory services include strategy development, divestitures, acquisitions, consultations, and business valuation. To discuss more ways to navigate around a buyer or seller’s initial meeting don’t hesitate to reach out to us. Contact us for more information.
Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.