The first time you show a business to a prospective buyer can often lead to some very surprising results. After all, it is the first time a broker can really see their seller in action and so it is very important that you not only prepare your client, but also use the meeting as a teaching tool for future ones. Every broker has their own style that works for them. However, since these meetings can become all too routine for many brokers, it's a good idea to sometimes refresh one's agenda and strategies.
- Prepared the Seller In Advance
In advance of the meeting, let the seller know what a typical first meeting entails: what the routine should be, the typical questions they will be asked, what your role is during the dialogue and what information they should and should not be prepared to divulge. Let them know they should be relaxed and that you are there to not only steer the conversation, but most importantly to protect their interests. They should not oversell the business or appear too eager to divest of it, while at the same time they should convey a level of enthusiasm about their company and its future. Some brokers and sellers prefer not to have the meeting at the site of the business and that is a personal choice. Regardless, letting a buyer see the actual operation is something that has to be done at some point and while it may be after a few meetings off site, it is unavoidable. Wherever possible, it is preferable to have it at the business, but again, that is more dictated by the flow of the interaction and may be put off for a later date. - Curb Appeal Counts
Just like in residential real estate, making the business shine aesthetically is very important. This goes beyond the place looking neat and clean, which, at the very least, is a must. Nobody wants to see a messy organization, as the immediate conclusion is the whole business is a mess and disorganized. It doesn't take much to pretty things up; making the extra effort will go a long way to convey a well-run operation. - Lights, Camera and Action
Unless you are showing a funeral home, nobody wants to buy a dead business. Set up the meeting at a time when the seller knows there will be a strong level of activity going one. Regardless of the business type and how well or poor it is doing, there are certain consistent times when the phone is ringing, or customers are more abundant and general activity is at its peak. For example, if it is a contracting business, the mornings will usually be the most active with trucks and staff getting prepared for their day. A prospective buyer will be infinitely more encouraged knowing there is ongoing activity and therefore letting them see this action is a huge asset. - Let The Parties Get To Know Each Other
The first showing is like a first date; the parties are feeling out each other and deciding whether or not they want to go on a second date. Allow them the opportunity to talk freely. If either asks or replies incorrectly or inappropriately, jump in and correct it. Keep in mind that you as a broker have likely has hundreds of such meetings but it may be entirely new for the buyer and seller. They may be intimidated or nervous so allow them to relax and be sociable. At the same time, you want the parties to know that you, as the broker, are the link between the two parties and so having an authoritative yet accommodating presence is critical. - Steer The Conversation
Due to lack of experience or ignorance some buyers can ask some pretty ridiculous and often bullying questions. For example, if they do request highly confidential information that a seller unwittingly offers to provide, the broker has to interject and advise them that the information will be made available at the appropriate time. Similarly, it is always a good idea to clearly outline the process for the parties in a "what happens next" scenario. Do not assume their familiarity with the process; this may all be new to them. Outlining how the ongoing discussions will evolve is usually a very helpful barometer for the parties. It is also a good idea to set up the next steps (if there are any) so both sides make a commitment to further discussions. - Post Mortem
Immediately after the meeting review the interaction with them and outline if they need to make any changes for future meetings. Additionally, if there is any agreed upon follow up (i.e. information agreed to be provided) get it to the parties right away. If the buyer finish the meeting excited about the business or the seller is eager about the potential of selling to this particular buyer, do not allow them to cool off. Keep the momentum going and their interest level high.
Overall, you should make the most of your first meeting. This is your chance to impress the prospective buyer and further establish the relationship. This is also a chance for both you and your client to evaluate the prospect and decide whether or not they're a good fit as a potential new owner.
Article at: 6 Important Steps When Showing A Business To Prospective Buyers for the First Time - BizQuest.com
For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at eric@edisonavenue.com or 239.738.6227. Also, visit our Edison Avenue website at www.buysellflbiz.com.
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