To Sell Your Company, Think Like a Buyer
The Internet is filled with tips to sell a business in Chicago and across the globe. You’ve heard them all before: Sell when your company is thriving.
The Internet is filled with tips to sell a business in Chicago and across the globe. You’ve heard them all before: Sell when your company is thriving. Prepare for due diligence. Find the right buyer. Develop an integration plan. While these tips are accurate, they neglect one of the most important aspects of a successful transaction: empathy. Yes, really. The ability to think like a buyer—to truly understand what buyers need, and how best to speak to those needs—is often the biggest thing standing between sellers and a successful transaction. Here’s what you need to know about prospective buyers.
In M&A, Empathy is Key
When you’re trying to sell your business, it’s easy to get bogged down in your own concerns—retiring with enough money, keeping your business afloat, protecting your staff. Buyers don’t care about your needs. They want to minimize risk, and profit for as little effort as possible. So centering your love of your business, your desire to move on, or how proud you are of your work is unlikely to work. Instead, you have to empathize with the buyer’s biggest concerns, then address them in a way that feels accurate, truthful, and reassuring.
What Do Buyers Want Anyway?
No two buyers are alike, and assuming there is a single prototypical buyer is a mistake. Private equity firms have radically different needs from first-time business investors. But one thread unites most buyers: a desire to minimize risk and maximize profits. Buyers don’t believe what you tell them; they believe what you can demonstrate. And they don’t want bland reassurances. They want reliable projections and a business that is clearly profitable. Keep this in mind, and then adjust your approach based on the unique needs of each buyer.
Thinking Like a Buyer
At the negotiation table, it’s easy to get stuck in your own head—and frankly, your own ego. A reactive stance, though, is doomed to fail. Always keep the buyer in mind, and remember that emotions subtly motivate behavior. Some questions to ask as you navigate the process include:
- What is the buyer feeling, and how is it coloring their behavior and reactions?
- What is the buyer’s biggest concern right now? How can I address it?
- What are the buyer’s unspoken needs? What may be happening that I don’t know about?
- What factors are most significantly influencing the buyer’s decisionmaking process?
Speaking to Buyer Needs
Once you understand the buyer’s needs and concerns, you’ll be better positioned to speak to them, rather than reacting defensively. Some questions to ask yourself include:
- Is there specific information I can offer to allay buyer concerns?
- Is there publicly available information about my company that might concern the buyer? Can I address it?
- How accurate and reliable are my forecasts, and what can I do to make them more reliable?
- How can I be more responsive to due diligence requests?
- Has this relationship suffered in any way that I can repair?
- Can I give something up to show good faith, then get something in return?