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I have been evaluating why some of the deals we have done go smoothly, and others seemed to have many twists and turns. And I’ve determined:

It comes down to TRUST.

Trust is the most crucial factor in getting a deal from beginning to end. So what am I speaking about?

The advisor must trust that if they achieve their client’s goals, the client will work hard to complete a transaction. The advisor needs to be committed to the process by working with the buyer to accomplish what is required to get through a due diligence review and a complicated legal process, no matter the size of the deal.

Trust between the advisor and buyer is crucial as not all information shared in meetings or within the buyer’s organization may align. This can result in the need for revised terms during the negotiation process.

Even the best communication sometimes leaves each side scratching their heads and asking themselves, “What did I miss here?” Don’t end a transaction if you have trust issues, even difficult ones. Cool heads and experience usually help create alternative solutions to overcome problems or obstacles, and the transaction usually gets closed.

Deals usually break down only when an expectation appears altered, contrary to discussions or agreed terms. It could be one significant expectation or a series of smaller expectations. These issues erode the trust formed in the initial part of the process.

All parties need to know that, going into a process, issues will arise and that the expectation is that these issues usually have solutions. I say “usually” because sometimes technical tax and structure issues just can’t be altered. Even if the buyer has done the same transaction many times, there are differences in agency makeup that can limit a buyer’s ability to complete the transaction as they have done in the past.

It is essential if you are a seller that you believe that the buyer you select is someone you can trust to make the necessary business decisions to enable you to get a deal to the finish line. In my experience, I have learned that it is not what happens to you but how you deal with what happens to you that makes all the difference.

Ultimately, trust is the foundation of any successful transaction. Building and maintaining that trust requires honesty, transparency, and commitment from both parties throughout the process to achieve a mutually beneficial outcome. By understanding these principles, you will be able to increase your chances of closing your deal successfully, as well as build stronger relationships between yourself and other stakeholders involved.