8 Tips on Understanding the Owner of a Business for Sale
It is to the buyer’s advantage to understand the owner of the. When the seller believes you are the right person to buy the business, he or she will try to make the deal happen even to the extent of structuring the terms to accommodate you. Here are some tips on how to purport yourself to the owner of the business that you want to buy:
1. Put yourself in the seller’s shoe. Factor in the human element in the negotiations.
The seller may have the same level of anxiety as you do regarding the transaction. Selling the business is a monumental emotional decision on the seller’s part. So much is at stake – years of hard work, sacrifice and probably, all or most of the family’s fortune. Tread with respect.
2. First impression is critical.
Do your homework so you are prepared for your initial face-to-face meeting. This is like the proverbial first date or first job interview. Be on time and properly attired. Do not be a “difficult” person. Try to make the discussion a positive experience.
3. Be sensitive to the owner’s apprehensions.
Gauge the seller’s reaction to key issues. Nod every now and then and reassure the seller that you understand his or her concerns. Do not be a cold, rigid and demanding buyer. The seller may react negatively and throw you out, telling you not to come back.
4. Understand where the owner is coming from.
Understand the seller’s reluctance to show the financial and operational records of the business to prospective buyers. How would you feel to have years of your work scrutinized by any Tom, Dick or Harry? You must prove to the seller that you are not an ordinary “looker” but a discreet serious buyer worthy of examining the company’s numbers.
5. Listen carefully to what the sellers conveys, and follow through with your questions.
Be an educated buyer. Be methodical so you can cover all areas of concern. Ask appropriate questions. Have a give-and-take attitude during the meeting. Communication between you and the owner is important. The owner can provide invaluable information beneficial to you. You can learn from the experiences, anecdotes and stories that the seller shares. Be tactful in extracting information regarding the business.
6. Watch your language and attitude.
Do not have a know-it-all “superior” attitude. Be careful in phrasing your questions. Do not lace your comments with insulting or humiliating remarks on how the owner should run or should have run the business. With humble demeanor, impress upon the seller that you have the capability, knowledge and drive to build on the success of the business. This will make the owner happy to hand over the business to you.
7. Be credible. Earn the owner’s trust.
Do not waste the seller’s time by being late to your meetings, not following agreed time tables, being indecisive and going around in circles. It takes time to earn the trust of another person and it is very easy to lose it.
8. Build a solid relationship.
A rapport or chemistry between both parties will be a big help in the discussions, negotiations and in bringing about a solid relationship. A harmonious relationship will benefit you should you need advice or help from the former owner later on.
Do not rush the transaction – you have to follow the correct steps in. There is a process where each step has its own sequence and specific purpose. Following the process will save you time, effort and money. Let the negotiations follow its natural course.