When you have your sights set on a new business to purchase, it is crucial to be well-prepared for that initial call. We know from experience that sellers carry out a thorough evaluation of buyer offers, and that the success of the first call can be key to progressing to the next step.
To ensure your deal gets off to the best possible start, we’ve put together a game plan to help you nail that initial call with the seller or their broker:
1. Build a human connection
This is the most important point, and all other points are dependent on this one. Selling a business is more emotional than transactional, therefore sellers want to feel connected and comfortable with a buyer. It’s not uncommon for a seller to take a lower offer from someone whom they built a better connection with.
2. Find out what the seller wants in an offer
Although rarely done, this can be achieved by asking directly (e.g., I would like to craft an offer that meets your needs/what are the things you are looking for in a good offer). It also can be deduced by exploring the seller’s family connections, hobbies, why they are selling, and the seller’s financial situation. This will guide you in crafting your letter of intent (LOI) structure, which is why it’s important that this call takes place before you submit your LOI.
3. Show the seller you are professional
Some buyers may lack professionalism. Brokers are experts at spotting these people and can shield the seller from them. In your initial call, find ways to display professionalism. If on a Zoom call with an experienced seller, be aware of your attire. If you have already identified a lawyer, lender, and accountant, mention your team’s experience in M&A. Communicate that you have a team in place and are ready to move quickly. Drop hints about your background and professional abilities.
4. Present as reasonable and easy to work with
The seller and broker are trying to find the best offer. However, often the best offer is not the highest one. The best buyer is one that will be reasonable and ensure a pleasant process. Make it clear that you view M&A as collaborative, and you are not trying to take every penny off the table.
5. Display industry knowledge
This can be a tough one for industry-agnostic buyers. Sellers speak their own industry language. If possible, you should learn enough about the seller’s industry to show the seller you are knowledgeable about their business. Often sellers will be inclined to sell to buyers who are familiar with their industry.
The initial impression you make on the seller will often determine your success in executing an LOI and being the chosen buyer. Keep these points in mind and you will ace that call.
Want extra support during the purchase process? Enlist the help of an experienced broker who will guide you through to completion and beyond – take a look at our buyer brochure to learn more.