In setting up a meeting for a seller recently, I mentioned to a potential buyer that it was very important that they be prepared to tell their story. Their response was short and to the point, they told me, “This isn’t a First Date.”
That exchange will always stick in my mind as an example of many buyers misunderstanding of what it takes to do a deal. The funny thing is, the more I think about it, I realize how much the first meeting is like a first date.
For most deals, an advisor arranges the first meeting and, while they will be familiar with each party, it’s the first time the buyer and seller have met in this context. That sentence could easily describe a first date set up by a mutual friend. When you take it further, the challenges in that first meeting are the same as the ones you might encounter on a first date.
Nerves
Every one of us knows how nerve-wrecking a first date can be. Especially when it’s your very first, first date. That’s the position most sellers are in. While you may be an experienced businessperson, you will still feel apprehensive about the first meeting. You have the pressure of knowing that you really want to make a deal, but you’ve never done it before. You’re still coming to terms with the decision you’ve made to sell the business, and now you need to figure out whether you want to do this deal or not.
It can be a lot of pressure that makes preparation really important. The more prepared you are, the more at ease you’ll feel. Talk to your advisor, they will have an understanding of both your agency and the seller; they’re the ones who believe you’re a good match and they can put you at ease.
Overconfidence
Buyers are usually more experienced in these kinds of meetings than sellers. While an agency may acquire multiple other agencies over the years, you’re only likely to sell an agency once. That experience can lead to overconfidence. Many buyers walk into the meeting with little or no preparation and expect the seller to fall at their feet. Whether it’s a first date or a first client meeting, overconfidence or demonstrating a lack of interest is always a turn off.
Finding Common Ground
The key to every deal is common ground. When you’re selling your agency, you want to find a connection with the buyer. Similarly, the buyer is looking for ways that your agency can add to their business. The key is finding common ground. Finding shared values and goals will also help drive the conversation along and move you closer to a deal. Conversation and common ground are some of the cornerstones of every one of life’s relationships.
Be Yourself
One of the first things an advisor will tell a client is to be honest. For both buyer and seller it’s vitally important that you are open and honest about your goals. When you hold things back, you’re only giving the other party a reason not to complete the deal. You may think that by over-emphasizing certain qualities or being economical with the truth you are creating an ideal partner, in truth you’re just setting yourself up for problems down the line.
This Could Be The Start Of…
Once that first meeting is over you will have a lot to think about. You might have your mind made up or you may be wavering. The most important thing is to be clear in your thoughts. Think the buyer’s proposition over, talk it through with your advisor and decide what happens next.
Remember that as the seller, you are in control of the final decision. Make sure that any decision you make is made for the right reasons. Just don’t wait too long to make up your mind, because the buyer will be well aware that there are many other fish in the sea.
Selling your company can be a bit unsettling, our whitepaper on the Lifecycle of Your Agency should help you better understand where you stand, and where you are going and hopefully, alleviate some stress.
