When selling a business, you may receive more than one lucrative offer from a series of buyers. 98% of sellers find it challenging to sift through all the offers in order to determine the right buyer. So, how do you go about managing several potential buyers?
Fortunately, there are strategies that a seller can learn and adopt which will significantly improve buyer management skills. Here are five of the best ways to effectively handle possible business buyers.
1. Be an attentive seller and listen to the buyer
Most sellers find selling their business difficult because of an inherent attachment they have developed to it over the years. To be fair studies confirm that the sentiments entrepreneurs have for their businesses are similar to the feelings a parent has for their child. Which is why selling a business brings about a sense of loss. However, despite these psychological difficulties, listening to the buyer is probably the biggest thing you need to do as a seller.
By asking pertinent questions and then being attentive you can uncover a buyer’s hidden interests. Take note of what the buyer is looking for. Listen to how they talk about your business. Be mindful of the details. By simply listening attentively, you can distinguish between buyers who have a real vision, care about your employees, and won’t drive the company into ruins from those whose reasons for buying don’t resonate with your ideals.
2. Respect the buyer and their opinions
Research in the social sciences teaches us that people are reciprocal by nature and have a tendency of responding to others’ actions with similar behaviors. This means if you show your buyers respect they are more than likely to cooperate and respond in kind. To ensure smooth negotiations and talks with a host of buyers keep your attitude in check.
Selling a business can take months. You don’t wish to have to deal with people who are constantly on edge, hostile, and belligerent – it’s exhausting. As a seller, your attitude sets the tone for your interactions with the buyers. So, part of managing different buyers is simply learning to respect the buyer and their opinions.
3. Keep track of all conversations
Did you know that you forget 40% of anything you learn in 20 minutes? Within a month you’ll have forgotten 90% of it. With so many ways to record information nowadays, there is no excuse for not keeping track of your discussions with each buyer.
You don’t wish to forget key details about your buyers. Record your conversations and have them transcribed so you can reference which buyer said what and when. Buyers appreciate it when sellers go to great lengths to remember details.
Paying attention to detail includes sending buyers information in a timely manner and following up on a conversation with additional insights or feedback. Because of how busy life can be, one way to ensure that you don’t forget this courtesy is to diarize information especially if you have to call someone or meet in person.
4. Establish an alliance by getting to know the buyers
The importance of having a relationship with your buyers cannot be overemphasized. In order for goodwill to prevail try to forge an alliance, a personal connection with each buyer by scheduling an informal lunch or a round of golf. It’s an opportunity for small talk and gets you insider information about your buyer.
By utilizing other ways to build rapport outside the office you can solidify trust between yourself and your buyers. Professor Janice Nadler from Northwestern University concluded in her studies that buyers and sellers that spent even five minutes talking about abstract matters not related to the upcoming sale of the business were more cooperative, more open to further discussion, and were less aggressive during negotiations.
5. Don’t fear conflict and confrontation
Conflicts and confrontations may arise during a business acquisition process. Having an experienced M&A business broker on your side can help diffuse the tense situation. Handling multiple buyers means you need to be able to identify problems and offer solutions. If buyers bring issues don’t try to tackle them all at the same time. Address one issue at a time.
When acquiring a business difficult conversations may need to be had. How do you go about this? Be direct when talking to the buyers. Don’t hide information. Plan out the conversations that you’re going to have with each buyer ahead of any meeting. Keep a watch over the words you use, your tone, and body language. Being able to manage your emotions is also key.
Bonus Tip: Successful sellers acknowledge their feelings and have a post-exit plan
Selling a business is an emotional roller coaster of sorts. There is definitely a psychological price to pay with many business owners plagued by thoughts and feelings of regret after the sale. Over the years depression triggered by selling one’s business has been linked to numerous entrepreneurs and even the untimely death of the fashion industry icon Kate Spade.
Another entrepreneur who fell into a deep depression after having sold their business is Markus Persson the brains behind Minecraft games. After selling his business to Microsoft in 2014 for an impressive $2.5 billion, it didn’t take long for Persson’s sense of loss to become the dominant force in his life.
Failure to acknowledge one’s feelings can be dangerous. M&A advisors can assist sellers with more strategies on how to sell effectively and craft a post-exit plan to help cope with any adverse feelings that may follow.
Consult with an experienced M&A business broker
Sun Acquisitions provides a host of business advisory services to facilitate the buying and selling of businesses. From preparing for a divestiture, conducting due diligence reviews, to analyzing target opportunities, and developing acquisition strategies, our expert team can assist in various capacities. Contact us to learn more about how Sun Acquisitions can help you during the buying and selling of a business.
Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.