If you have just entered the business market, you may have noticed that sellers are not falling all over themselves to court you and sell you on buying their business. Considering how much money you are about to spend, you may feel like sellers should be doing more to entice you – but business sales don’t work that way.
It’s not like buying a really expensive car or a really nice watch where sales people fight over you and do everything they can to close a deal.
When you own and run a business, it is a life-encompassing affair. Your business is your baby, so selling that business – which involves handing over the keys and walking away – can be a very emotionally difficult thing to do.
Whether it’s productive or not, many sellers look at buyers as the villain in the story. They see questions as a personal attack. They get offended when you find issues. They get easily insulted during negotiations. You get the idea.
Another issue arises because most business information is inherently private and proprietary, so it can be hard for a seller to hand over that information to someone who is essentially a complete stranger.
When sellers first list their business, they put together a package of general information, and that information is probably all they are comfortable handing over. Trouble can start when you as a buyer want more information than a purposefully vague listing or a basic marketing package.
As a buyer, you are entitled to all the information you need to make an educated decision, just try to see your requests from the seller’s point of view. Would you be willing to answer a 90 question list after you had provided the answers to those questions in a marketing package the buyer clearly hasn’t read? Would you love the idea of complete strangers digging around your financial records?
The key to working together with sellers is to have a bit of patience and to use your intermediaries (your brokers and attorneys) as a buffer between the two sides. A good broker, for example, will ask you to read any information already supplied and pare down that 90 question list so as not to offend the seller.
Working together with the seller is of the utmost importance if you want your deal to reach a closing table – and keeping things amicable will make the training and transition period (where both sides will be working together) from being an awkward disaster.
Are you a new buyer in the market and have had trouble finding cooperative sellers? Do you have questions about what information you will be able to access and what kinds of questions are appropriate to ask a seller? Ask us! Please feel free to leave a comment or question, and we would be happy to help you on your road to business ownership.