Can you Understand Your Buyer’s Key Motivations?
Negotiations can be tricky affairs. One wrong move can undo a tremendous amount of work. In negotiations, it is best to take a moment and think about the other party’s motivations.
What are their needs and how best can you meet them? Understanding where your buyer is coming from increases the chances of a successful negotiation.
What Appeals to Most Buyers?
When it comes to selling a business, you likely will not know your buyer personally. This means that you will not know what they value most, how exacting their standards will be, and how easy or challenging they will be during negotiations. That’s why it is imperative to err on the side of caution and act in such a way that would appeal to most buyers.
Ensuring that your business is in strong financial health means that your business will be appealing to both a corporate executive as well as an individual buyer with a leadership/managerial background. Keep in mind that individuals who buy businesses will want a strong ROI, and often they will want the responsibilities that accompany that investment to not interfere too greatly with their current lifestyle.
Playing into Emotions
In general, buyers tend to be the most excited at the beginning of the sale process. It is at this point that you can expect your buyer’s passion to be its strongest. As a result, the first stages are when you want to keep your presentation and approach the most realistic. The reason is that once the surge of passion has worn off, your buyer may otherwise feel that you have tried to oversell your business.
Being Forthcoming with Information
It is quite common that you will not at first know if your buyer has previous experience in your market. As a result, you shouldn’t assume that they understand anything about your business or industry. In short, it is definitely in your best interest to be very honest about your business and what is involved in running it. If there are issues that they will invariably discover, then it is best to go ahead and disclose those issues early on as it establishes trust and goodwill.
Another area to consider is what a buyer may expect of you after the sale. A buyer who already possesses a background in your niche would already be very familiar with the ins and outs of your industry. Having you around after the sale may not be viewed as necessary or beneficial.
However, with that said, the exact opposite may also be true. You may be dealing with a buyer who is in dire need of your expertise. These factors could be of critical importance in what you offer your buyer in terms of your availability. Again, that’s why it’s best to not make assumptions and make sure your terms would appeal to a wide variety of backgrounds.
An Investment of Value
Invest the time to understanding your buyer’s motivation. The more you understand what it is that your buyer wants out of the transaction, the greater your chances of focusing on the areas of your business that best match those expectations.
When it comes to the motivations and concerns that prospective buyers may have, a business broker can add a new level of understanding. The value that your broker adds to the process of selling a business is difficult to overstate.
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How to Ensure Confidentiality During your Sale
Selling a business is a process that depends upon professionalism and confidentiality. Selecting a business broker who understands the critical role that confidentiality plays is simply a must. Unfortunately, countless sellers have in fact dealt with a situation where a breach in confidentiality has caused a deal to fall apart.
A failure to maintain confidentiality can lead to a slew of negative reactions from a range of parties. Everyone from supplies and vendors to creditors could react in a way that could harm your business, for example, vendors could change their terms and this could in turn negatively impact your cash flow.
A breach of confidentiality could also lead to negative reactions amongst both employees and customers. The reason is that employees may begin to worry about the security of their jobs and may also become nervous about the change in management. These fears could prompt employees to find a new job and leave you with a position that needs to be filled. Potentially more significant is the fact that the loss of key personnel could cause your buyer to have cold feet.
As if all of these factors were not enough of a concern there is also the issue of the competition. If your competition gets wind that you may be looking to sell they may take advantage of the situation and start attempting to steal your customers.
Finally, a breach in confidentiality could send potential buyers running. The headaches that are often associated with a breach in confidentiality are such that potential buyers may simply drop the deal.
The best way to protect your confidentiality is to opt for a great business broker. A business broker is an expert in prompting a business without notifying the competition, your employees, vendors or anyone else. The process is both an art and a science.
When attempting to sell on your own there are many and diverse pitfalls. Sellers are much more likely to accidentally reveal who you are; after all, a seller has to provide phone numbers, email addresses, physical addresses and other critical and identifying information. Even your home phone number could be traced back to your identity and ultimately your business.
A seasoned business broker can help you bypass these potentially damaging issues, by not just shielding your business’s identify but also by ensuring that all interested parties sign confidentiality agreements and are pre-qualified. In this way you only reveal what is absolutely necessary. In short, it is best to work with a business broker and maintain your confidentiality at all costs.
Copyright: Business Brokerage Press, Inc.Read More
GABB Million Dollar Club Application for 2016 Opens
The GABB is now accepting applications for the 2016 Million Dollar Club, recognizing members who have sold businesses worth at least $1 million in the previous year. The deadline for submitting applications is Nov. 7, 2016.
Awardees will be honored at the annual GABB Holiday Gala on Dec. 6 at Maggiano’s Perimeter Center.
GABB members are eligible for the:
- Million Dollar Club if they have eligible sales from Nov. 1, 2015 to Oct. 31, 2016 of $1,000,000 to $1,999,999.
- Multi-Million Dollar Club members will have eligible sales generated totaling $2,000,000 or more during the same period.
- Life Members of the Million Dollar Club have been elected to the Million Dollar Club for three consecutive years or any 5 years.
- Phoenix Award Member is anyone who has been elected to the Million Dollar Club for any 10 years.
- Silver Phoenix honors a person who has been elected to the Million Dollar Club for any 25 years.
To be eligible for the award, an applicant must be a current member in good standing of the Georgia Association of Business Brokers and only
transactions closed after the effective date of membership in GABB will count as Million Dollar Club volume. All transactions must be submitted to Pratt’s Stats to be eligible.
The online application, along with detailed rules about the club, can be found at the GABB website.
Please contact Diane Loupe at georgiabusinessbrokers@gmail.
Oct. 25 GABB Meeting for Broker and Affiliate Members Only
The Georgia Association of Business Brokers will hold a members only meeting on Oct. 25, in contrast to meetings that are normally open to the public.
That means that only current broker or affiliate members will be eligible to attend the Oct. 25 meeting.
At this meeting, members of the GABB board will be making a presentation about a significant proposal related to the future of the organization. Also, nominations for the 2017 GABB board will be taken at this meeting.
GABB Affiliate Germaine Curtin of Curtin Law is the meeting sponsor.
Germaine Curtin was born and raised in Westchester County, NY. She obtained her BA from the State Univ. of NY at Albany in 1980 and graduated from Albany Law School. After graduating, she worked as a financial consultant, where she learned to prepare tax returns and advised clients with respect to investments. She earned her FINRA Series 7 securities license.
Germaine is licensed to practice law in California, Georgia, New York and North Carolina, and now shares her time between New York and Georgia.
With a long-time interest in tax, and understanding the importance of tax issues in every business transaction as well as the obligation of every resident to file income tax returns, Germaine obtained her LL.M. in Tax at the Univ. of Alabama in 2010, graduating with honors. Germaine analyzes the tax issues as well as the business issues in every transaction, saving the client time and money.
Germaine is a member of the Georgia Association of Business Brokers, is a certified instructor for the International Business Brokers Association as well as a member of the Saratoga Chamber of Commerce and the Capital Region Chamber of Commerce.Read More