The first buyer/seller meeting is an opportunity for the buyer to scope out the owner and their business on a deeper level.
Alongside this fact-finding mission, it’s vital that rapport and trust are built. This is because a smooth, successful negotiation stage depends largely on a positive connection.
Quite a lot to think about isn’t it?
It’s this combination of managing hard facts and soft people skills that can often feel intimidating.
And it doesn’t matter how many times you’ve done it! Many of my clients say that the first meeting is one of the most anxiety-inducing parts of buying a business.
The good news? It doesn’t have to be.
By breaking it down into practical steps and guiding you through what to expect, this blog should help make the whole process easily manageable.
Go In With A Goal
Even the most laid-back buyers should go into their first buyer/seller meeting with a strong plan.
Your four main goals are to:
- Build rapport. Be friendly and respectful. A good first impression matters and will help to demonstrate your credibility and build trust.
- Reassure the seller. Show the seller you understand their business and assure them you can preserve their legacy. They’ve likely spent years of blood, sweat and tears building their business and will want to leave it in good hands.
- Screen the deal. This is a two-way street. As well as satisfying the seller, be sure to vet both the deal and owner to make sure you’re on the same page.
- Get the NDA. A Non-Disclosure Agreement ensures no sensitive information can be shared outside of the deal. Don’t expect the seller to release any confidential information without an NDA in place.
These four goals cover both your needs and those of the seller and should get you enough information to be able to deem the deal worthy or not.
How To Hold An Initial Meeting
Though remote working and virtual communication are now commonplace, nothing beats sitting down in the same room.
For that reason, always strive for a face-to-face initial meeting where possible.
Because barriers such as the disruption of non-verbal cues can be really disorientating. Lack of body language can stunt meaningful communication between buyer and seller, not allowing either party to get their points across in the way they would like to.
Generational differences might also play a part here. Older sellers may not be familiar with Zoom, for example, or might simply prefer business done the way they’re used to.
If it is decided to meet in person, offer to meet the seller at a neutral location. Buyers can sometimes be keen to meet at the seller’s own offices but this is impractical for two reasons:
- The seller doesn’t really know who you are yet.
- It can cause the seller unease over keeping their plans quiet.
Up until this point, the seller is likely to have kept the potential sale to themselves so as not to spook staff or the supply chain.
Though it reportedly takes 7 seconds for first impressions to be made, the way you conduct yourself throughout the initial meeting also speaks volumes.
Prior to the meeting, scour both the internet and the seller’s social channels to hunt down common interests or notable facts that you can drop into the conversation.
Using this approach shows you care about the person behind the business.
During the meeting:
- Ask clarifying questions.
- Let the buyer speak without interruption.
- Tell the owner what you like about the business.
- Listen intently.
- Try to establish any clear growth opportunities.
Overall, be considerate and respectful. Warmth and openness can go a long way.
What To Ask
Asking all of the wrong questions, or having nothing to ask at all, stinks of unprofessionalism.
Appearing unprepared tells the seller you’re not serious about buying their business. By forgoing the legwork prior to the meeting, you’re also wasting this chance to make sure the acquisition is right for you.
Not preparing might mean you make a big mistake. Can you afford to?
Write down your questions ahead of time so that you can dig deep with ease.
Key questions to ask include:
- Why are you selling?
- What are your plans post-sale?
- How much are you looking at for the business?
- What aspects of business are critical to any sale?
Don’t be afraid of that niggling feeling that says you’re intruding. Sellers should understand that buying a business is a huge financial risk – it is completely within your right to delve in order to feel satisfied enough to proceed.
You need to know what you’re buying, after all.
What Not To Bring Up
Important but easy to remember…
DO NOT DISCUSS THE MONEY.
Now is simply not the time to discuss deal structure.
If asked, say that you have financial backing if you feel the deal is right.
Doing The Pre-Work Is Essential
It’s not enough to simply be friendly. It is imperative that buyers come to the initial buyer/seller meeting expertly prepared.
Not only does it show you care – it will get you the answers you need to work out whether this deal is worth your time and money.
Because let’s face it, you don’t want a second meeting if it’s not.
Need some help?
Prepping for the initial meeting can be stressful, especially if it’s your first time buying a business.
Hopefully, this blog will have broken it down into manageable chunks. But if not, and you’re feeling a bit lost, reach out! The Business Consultant has plenty of experience on both sides of the table and can help you work out the right questions to ask.
Book a call with Clive and let him support you through that initial meeting so you can make sure this purchase is right for you.