No matter how inexperienced or even gullible a prospective business buyer may be, no owner or broker will ever convince someone to buy a particular business; so don’t even try.
Buyers need to sell themselves! This can only be done when the buyer builds up enough confidence and trust in the business’ past and feels strongly they can take it over and succeed.
Have you ever encountered a slimy salesperson at a retail store, car dealer or when buying insurance? I don’t know about you, but I get so nauseated by such characters that I actually lose focus on what I am trying to buy. The same holds true in the business buying process. Sellers who present their businesses and answer buyer questions with a sales pitch usually turn off buyers and rather than building goodwill with them, they cause mistrust. Getting someone to reverse their thinking once they have formulated a negative impression is very difficult, if not impossible.
I have seen this in cases where owners are trying to sell their businesses on their own and also in cases where they have hired a business broker who just pushes too far.
Certainly, all of the positives of any businesses must be articulated; every buyer wants to see those positives. But
understand that buying a business is a massive decision for most individuals and the majority of prospective business buyers have never bought one before. Any seller who believes they can convince someone to buy their company is wrong.
Overselling or ANY selling doesn’t work!
Want to know the simplest way to sell a business? When a buyer and seller trust one another, and the buyer truly wants to buy a business and the seller wants to sell, you cannot stop the parties from finding a way to get a deal done. But this trust has to be built; it cannot be sold or rammed down someone’s throat.
Sellers must adopt a balanced and factual strategy.
Buyer questions should be answered accurately, directly and without fanfare or sales hoopla.
The objective of a seller must be to engage the buyer in a meaningful dialogue and to work towards building mutual credibility. This can only be done over time and by telling the truth, never hiding any issues, being open-minded to various deal structures and by conveying a realistic picture of the business history and prospects for the future.
To this end, an excellent exercise for any seller is to list out every possible question they think a buyer will ask and think about how you will answer it. Of equal importance is to be willing to tell a buyer “I don’t know” or “I’m not sure” if you do not have an accurate answer to any of their questions. Obviously, no seller can guarantee a buyer’s success and that is not what any competent buyer is seeking. Rather, they (the buyer) has to build a case over time spent with the seller and in analyzing the business and industry in order for them to arrive at a decision to move forward and complete a deal.