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The Advantage of Buying an Existing Business

When most people think of starting a business, they usually think they will start from scratch, develop an idea, and build the company from the ground up. There are some major disadvantages with starting from scratch, including developing a customer base, hiring employees, marketing the new business, and creating cash flow… all of this is done without a well-built reputation or long-standing history in place. To avoid challenges, buying a business that is already in existence usually proves to be a better solution. Buying existing can have its advantages – including, but not limited to:

The Business Is Established.

An existing business already has structure in place. There is an established track record, a customer base, and a relationship already built. There is a physical location with furniture, fixtures, and equipment in place. The term “turn-key” may be overused, but an existing business is just that, and more. A franchise might describe their business as “turn-key”, but it ends there. Start-ups are just that, starting from scratch with all of the disadvantages as stated above and others.

The Business Has Existing Relationships.

There is a lot to be said for having an established relationship in place with customers, vendors, and suppliers. Most businesses also have experience employees, and that alone can be a valuable asset to a company. A new buyer might already have a relationship with various vendors, such as banks, advertising agencies, advisors, insurance companies, banks, etc., but if not ­– the existing business does and that can be transferred to the new buyer as part of the acquisition. Working with a professional Chicago area Business Broker or M&A Advisor at American Business Acquisitions will help ensure that all of these details are accounted for.

The New Business Risk.

When starting a new business, it doesn’t matter how much time, money, and research you invest, there is still risk involved when starting a business from scratch. You won’t have the financial track record, along with established policies and procedures that an existing business has in place. A prospective buyer can see the financial history of a business, like when sales or high or low, what the expenses entail, how much money an owner can make, and more. Also, in almost all cases, a seller is more than willing to stay on board to help teach and work alongside the new owner – sometimes free of charge for a reasonable period of time, and for compensation longer-term in some cases.

The “Unwritten” Guarantee.

When a seller finances a small portion of the purchase price, he or she is essentially saying that they are confident that the business will be able to pay its bills, and provide support for the new owner, in addition to making any required payments to the seller.

Copyright © 2022 American Business Acquisitions, Inc. 

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Are You Truly Ready to Become a Business Owner?

Owning your own business if something people frequently dream about, as there is a broad range of perks and benefits that go along with ownership. However, it is important for prospective business owners to take a step back and determine if they are truly ready for the next steps. In this article, we will explore three essential questions that any potential business owner needs to answer before taking those next steps.

Question One – Do You Have the Right Personality Type?

In a lot of cases, not everyone has the right personality type to truly enjoy being a business owner, and it is for the better that you have a clear understanding of your own traits before attempting a purchase. For example, you must be comfortable assuming a certain degree of risk.

Risk and business go hand-in-hand. Risk does not go away, even if your business is in prime operating condition. Not everyone is entirely comfortable taking on this level of risk. Being a business owner means that you not only take on a financial risk, but you also give up a certain degree of stability that comes with just being an employee. To sum it up, you must have the right mindset to operate a business.

Question Two – Are You Determined to Grow Your Income?

Owning and operating a business means that you’ll have to put in a great deal of work and potentially longer hours than you are accustomed to. Typically, this is necessary to build your business and increase your income. It is important that you ask yourself if you are truly ready for the amount of work that comes along with owning and operating a business. Statistics show that the longer you are a business owner, the more money you will generally earn.

Question Three – Are You Comfortable with Achieving More Control in Your Life?

At first glance, many people may instantly feel that they want more control over their professional lives. Yet in reality, this is not always the situation. Being a business owner means that you have far more control over your professional and business life. Most will view this as a great thing. It’s a good feeling, being able to allocate your time as you see fit and not having someone else control your fate. As a business owner, you are not just a part of the business, you are the person controlling, modeling, and guiding it. At the end of the day, there is nothing quite like being your own boss.

If you are ready for the amount of work and risk, then it might be time to take the next steps. To begin the process of owning a business, one of the best ways to start is to work with a Business Broker or M&A Advisor at American Business Acquisitions. ABA is your premier Chicago business broker team that specializes in the process of buying a business. The professionals at ABA have years of hands-on experience in the buying and selling of businesses and can help determine what kind of business is best for you.

The associates at ABA will work hand in hand with business buyers in locating a business for sale and then analyzes all business opportunities in order to determine how viable and profitable each specific business is. They will help determine the details as to what kind of business it is, where it’s located, how it operates, the history of operation, financial and operating projections, gather a list of assets, what all is included in the sale, and also any information relative to competition.

Any business buyer or buyer group can schedule a free consultation with the link on each page of the abausa.com website, which is: https://calendly.com/abameeting

Alternatively, buyers can email info@abausa.com or call 312.360.1955 and leave a message stating the best times for us to reach them with their contact information.

Copyright © 2022 American Business Acquisitions, Inc. 

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The 5 Must-Do’s When Considering Buying Any Business

Without a doubt, buying a business in Chicago or elsewhere, can be very exciting; however, prospective buyers mustn’t overlook what is truly important. So let’s take a look at the five most important steps that any buyer needs to take when evaluating a business. As a buyer, the simple fact is that you have no choice but to look beyond the sizzle and work to find the steak. In other words, determining the true worth of a business is essential.

#1 – Evaluate What is Actually Being Sold

No buyer should assume that they understand everything that is, or is not, being sold when buying a business. Therefore, one of the most important tasks for any buyer is to carefully evaluate the business of interest and invest the time to fully understand what the business does and what is included in the sale. This is a task that your Business Broker or Merger and Acquisitions Advisor here in Chicago or elsewhere will assist in performing to help a buyer understand the business of interest.

#2 – Understand Business Performance

Fully understanding the ins and outs of how a business performs can be more complex than it initially appears. On the one hand, the numbers don’t lie, and it is possible to quickly evaluate the business’s bottom line. On the other hand, however, when going through the evaluation process, you and your Business Acquisition Broker or M&A Advisor might discover that there are factors that could alter the performance of the business. For example, a buyer will want to consider the number of hours the current business owner is working and if the key employees contribute enough to the business in terms of labor, etc. There is a wide array of factors that can influence the overall operation, and these are just two examples.

#3 – Look at the Financials

Ultimately, there is no replacement for fully understanding the current financial standings of a business. It could be that a business has all the potential in the world. However, some buyers may obtain some sort of financing, so it is critical that the business has strong financials in its current state. Therefore, during the due diligence process, you and your team of professionals will want to carefully perform a business valuation or estimate of value, including, assessing the profit and loss statements, reviewing tax returns, balance sheets, and obtain any other important financial documents.

#4 – Evaluate the Business Plan

It is vital to have an understanding of the current owner’s goals and recognize what steps they’ve outlined to achieve those goals. As a new owner, having a solid business plan in place and knowing that there is a clear path forward to grow your business is essential for achieving that goal. A business plan template for new business buyers is available on our American Business Acquisitions website. https://abausa.com/creating-developing-business-plan-buy-start-business/

#5 – Look at the Demographics

Understanding your customers is one of the best ways to grow your business. For this reason, knowing the business demographics and why customers should remain loyal is very important. You will also want to know if there are any changes on the horizon, such as any new competition in Chicago if buying a business there or if a competitor is expanding in the Illinois area.

Evaluating a business is not a simple process. Working closely with a business brokerage professional intermediary who has years of experience in assessing all types of businesses, ranging from B2B or B2C service businesses or companies to large manufacturing or distribution companies. This first step is an excellent way to begin the process of finding the right business for your needs.

Copyright © 2021 American Business Acquisitions, Inc. 

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You Want to Buy a Business in Chicago? Here are 3 Factors to Consider

Do you think you have what it takes to be a business owner, but don’t want to start from scratch? Then you may be a great candidate to buy an existing business in Chicago!

While it can initially cost more to buy an existing company, there’s also way less risk.

  • The product or service has already been market tested
  • The brand is established
  • You can secure financing more easily
  • There isn’t any lost startup time

There are many elements that go into buying a business in Chicago or elsewhere, including environmental and social factors. Let’s take a closer look at some of these and how they might influence your decision to purchase.

Health and Safety Policies

A health and safety policy is a general approach to a company’s commitment to health and safety. A good policy details how the business will minimize the risk of injury and illness from workplace operations. While some industries are naturally higher risk than others, all businesses must have policies and procedures in place to protect employees.

Here’s some things to think about when you’re considering your options.

  • Do you want to choose a business that has well-established health and safety policies in place?
  • Do you want to create your own policy?
  • Do you want to delegate and possibly even hire a specific person to create and implement your health and safety policies?

Health and safety policies might sound like a boring aspect of owning a business, but it’s crucial to have strong ones in place in order to protect your employees and your business. If the business you intend to purchase already has policies in place, then it’s one less key operational responsibility to worry about.

Employee Well-Being

If you’re hoping for a smooth transition, buying a business with existing employees can be a smart decision. For example, consider keeping employees that hold certain licenses the business needs to operate. This saves you the time and hassle of having to interview and hire someone new and qualified.

However, if you choose a business with disgruntled employees, they aren’t likely to stay on board during the transition. Employees are the heart of the company, so if you’re buying a business with happy employees, then you’re generally in good shape.

Here are some tips to maintain employee happiness and well-being.

  • Pay a fair wage
  • Encourage open communication and ask for feedback
  • Keep morale up with a healthy work/life balance
  • Protect employee’s health and safety
  • Provide clear communication about employee expectations as well as company policies, manuals, and benefits

When looking for a Chicago-based business, keep employees’ well-being and performance in mind. Depending on the type of business, finding and keeping valuable employees can be difficult. Employees who are fulfilled and treated well are more likely to stay at a company and continue to perform exceptional work.

Don’t get off to the wrong start at the beginning. Build positive rapports by including existing employees on the new employment terms and respect the systems and relationships already in place.

Corporate and Social Responsibility

Consumers feel it’s important for businesses to demonstrate responsibility and take stances on current social movements. From our experience, we agree.

Chicago businesses that practice social responsibility tend to make more ethical decisions that protect their communities, leading to increased consumer trust.

Consumers like to support companies that share their values.

  • Consumers are willing to pay more if a company has a strong ethical footprint or mission
  • Consumers feel a shared connection with the business due to mutual values
  • Companies with strong social responsibility are more likely to be referred to friends and families, as well as promoted on social media platforms by loyal consumers

Rather than starting from scratch, you can purchase a business whose social and ethical values align with yours and carry on their reputation. Bonus – you’ll also have a solid customer base already established.

In Conclusion

As the major metropolitan city of the Midwest, Chicago is an excellent choice to start your business ownership adventure. It’s a city that thrives on innovation and holds American values and reputation to a high standard. When buying a business in Chicago (or anywhere, for that matter), it’s important to keep these factors in mind. They can help you make a more informed purchase decision that allows you to start working and growing your business right away. To learn more about buying a business in Chicago, contact American Business Acquisitions today.

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Is Your Business Charging Enough For Goods & Services?

A small increase in what you charge for your goods and services can make a tremendous difference to your bottom line.  The fact is that many businesses could charge more for their goods and services than they do, but fail to do so.  Owners often do not realize the great value of charging just one-percent more.  In this article, we’ll explore how charging even slightly more can dramatically impact your business.

Let’s consider a hypothetical example.  A business owner tells a potential buyer that he or she could safely increase their prices by 1.5% and do so without the price increase causing any negative impact to sales or business disruption.  The savvy buyer quickly realizes that the business, which has $70 million in sales, is leaving $1 million dollars on the table by not increasing its prices by 1.5%.  A smart buyer realizes that after purchasing the business, all he or she has to do is institute this small price increase in order to achieve a sizable increase in profits.

In his best-selling book The Art of Pricing, Rafi Mohammed explores the often-overlooked area of pricing.  He keenly observes that one of the biggest fallacies in all of business is to believe that a product’s price should be based on the cost of the product.  In The Art of Pricing, Mohammed points to several examples.  One comes from the restaurant industry.  He points to the fact that McDonald’s keeps entrée prices attractive with the idea of making up profit shortfalls in other areas, ranging from desserts to drinks and more.  Or as Mohammed points out, McDonald’s profits on hamburgers is marginal.  However, its profits on French fries are considerable.

Mohammed’s view is that companies should always be looking to develop a culture of producing profits.  He states, “through better pricing, companies can increase profits and generate growth.”  Importantly, Mohammed points out that it is through what he calls “smart pricing” that it is possible to extract hidden profits from a business.  Summed up another way, pricing couldn’t matter more.

All too often business owners, in the course of their day-to-day operations, fail to place sufficient importance of pricing.  Any business looking to achieve more will be well served by first stopping and taking a good look at its pricing structure. 

Likewise, buyers should be vigilant in their quest to find businesses that can safely increase prices without experiencing any disruption.  At the end of the day, small changes to pricing can have a profound impact on a company’s bottom line.

Copyright: Business Brokerage Press, Inc.

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Insights from BizBuySell’s 3rd Quarter Insight Report

Most business buyers and sellers are wondering what 2021 and beyond will bring.  BizBuySell and BizQuest President Bob House provided a range of insights stemming from BizBuySell’s 3rd Quarter Insight Report and a survey of over 2,300 business owners. 

The simple fact is that the pandemic has most definitely had a major impact on the buying and selling of businesses.  This fact is obvious.  But diving deeper, there are a range of insights that can be gleaned. 

First, owners do understand that COVID is a massive force in business right now.  According to the survey, 68% of owners feel that they would have received a better price for their business in 2019 than in 2020.  Only 37% of respondents felt that they would receive a better price this year.  Of owners who felt that they would receive a lower price in 2020 than in 2019, 71% of these owners said that their assessment was directly tied to the pandemic and its accompanying economic impact.

A question on the survey asked owners if the pandemic had impacted their exit plans.  55% responded that the pandemic had not changed their exit plans.  Additionally, 22% said that they now planned on exiting later, and 12% stated that they planned on exiting earlier.  In short, the majority of business owners were not changing their exit plans.

On the other side of the coin, buyers are acknowledging that the present seems to be a very good time to buy.  A staggering 81% of buyers stated that they felt confident that they would be able to find an acceptable price point.  In terms of their purchasing timeline, 72% of respondents stated that they were planning on buying a business soon.  Survey follow-ups indicated that large numbers of buyers were also planning on buying in 2021.

Generational differences are playing a role as well.  Baby Boomers tend to be more optimistic than non-boomers as far as their overall views on the recovery.  43% of Baby Boomers now expect the economy to recover within the next year as compared to just 30% of non-Boomers.  House pointed out, “Baby Boomers are the generation that did not plan, which makes it harder for them to adjust transition plans if they were preparing to retire, as small businesses don’t have the infrastructure and management teams in place to wait out a bad cycle.”

Based on the information collected by BizBuySell’s 3rd Quarter Insight Report and their survey, it is clear that there is a new wave of buyers on the horizon.  The report supports the notion that the pandemic has made small business ownership an attractive option for new entrepreneurs.  Factors driving new entrepreneurs into the marketplace include everything from being unemployed and wanting more control over their own futures to a desire to capitalize on opportunities. 

Finally, House notes that 2021 could be a “perfect storm for business sales,” as 10,000 Americans will turn 65 each and every day.  This means that the supply of excellent businesses entering the marketplace will likely increase dramatically.

Copyright: Business Brokerage Press, Inc.

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What Makes a Deal Close?

For every reason that a pending sale of a business collapses, there is a positive reason why the sale closed successfully.  What does it take for the sale of a business to close successfully?  Certainly there are reasons that a sale might not close that are beyond anyone’s control.  A fire, for example, the death of a principal, or a natural disaster such as a hurricane or tornado.  There might be an environmental problem that the seller was unaware of when he or she decided to sell.  Aside from these unplanned catastrophic events, deals abort because of the people involved.  Here are a few examples of how a sale closes successfully.

The Buyer and Seller Are in Agreement From the Beginning

In too many cases, the buyer and seller really weren’t in agreement, or didn’t understand the terms of the sale.  If an offer to purchase is too vague, or has too many loose ends, the sale can unravel somewhere along the line.  However, if prior to the offer to purchase the loose ends are taken care of and the agreement specifically spells out the details of the sale, it has a much better chance to close.  This means that a lot of answers and information are supplied prior to the offer and that many of the buyer’s questions are answered before the offer is made.  The seller may also have some questions about the buyer’s financial qualifications or his or her ability to operate the business.  Again, these concerns should be addressed prior to the offer or, at least, if they are part of it, both sides should understand exactly what needs to be done and when.  The key ingredient of the offer to purchase is that both sides completely understand the terms and are comfortable with them.  Too many sales fall apart because of a misunderstanding on one side or the other.

The Buyer and Seller Don’t Lose Their Patience

Both sides need to understand that the closing process takes time.  There is a myriad of details that must take place for the sale to close successfully, or to close at all.  If the parties are using outside advisors, they should make sure that they are deal-oriented.  In other words, unless the deal is illegal or unethical, the parties should insist that the deal works.  The buyer and seller should understand that the outside advisors work for them and that most decisions concerning the sale are business related and should be decided by the buyer and seller themselves.  The buyer and seller should also insist that the outside advisors keep to the scheduled closing date, unless they, not the outside advisors, delay the timing.  Prior to engaging the outside advisors, the buyer and seller should make sure that their advisors can work within the schedule.  However, the buyer and seller have to also understand that nothing can be done overnight and the closing process does take some time.

No One Likes Surprises

The seller has to be up front about his or her business.  Nothing is perfect and buyers understand this.  The minuses should be revealed at the outset because sooner or later they will be exposed.  For example, the seller should consult with his or her accountant about any tax implications prior to going to market.  The same is true for the buyer.  If financing is an issue it should be mentioned at the beginning.  If all of the concerns and problems are dealt with initially, the closing will be just a technicality.

The Buyer and Seller Must Both Feel Like They Got a Good Deal

If they do, the closing should be a simple matter.  If the chemistry works, and everyone understands and accepts the terms of the agreement, and feels that the sale is a win-win, the closing is a mere formality.

Copyright: Business Brokerage Press, Inc.

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Buying a Distressed Business 

It is safe to state that Howard Brownstein, President of The Brownstein Corporation, is a true expert in providing turnaround management and advisory services to companies, as well as their stakeholders.  Brownstein serves as an independent corporate board member for both publicly held as well as privately-owned companies and nonprofits.  During his career, he has been named a Board Leadership Fellow by the National Association of Corporate Directors (NACD) and served as Board Chair and President of its Philadelphia Chapter.  He also serves as Vice Chair of the ABA Corporate Governance Committee and has been named a Fellow of the American Bar Foundation.  He has been a speaker at many of the world’s top universities including Harvard Business School and Wharton.  Brownstein received his J.D. and M.B.A. degrees from the University of Pennsylvania.

Mr. Brownstein is considered to be one of the world’s top experts in distressed businesses.  He believes it is essential to remember that not all distressed businesses are, in fact, the same.  There is simply no way to know how bad things are for a given distressed business until one begins to “look under the hood,” and get a full view of what problems may lurk underneath. 

Brownstein firmly believes that distressed businesses can represent a real and often overlooked opportunity for buyers.  The recent economic downturn brought about by COVID-19 means that there will likely be a great deal more distressed businesses on the market in the coming months or even in the next couple of years. 

Why is a Given Business Distressed? 

Before you consider purchasing a distressed business, you absolutely must understand the core reasons for the distresses.  Without a proper and detailed understanding of why the business entered a state of distress in the first place, it is impossible to clearly articulate why the business will potentially be valuable in the future.  It is essential to be able to convey “what went wrong” and how the problems can be fixed.

Brownstein points out that while there are many reasons for a business to enter distress, two symptoms top the list.  The first is cash flow issues and the second issue relates to management.  Often it turns out that the management was simply not rigorous enough.  He also notes that companies will tend to gravitate to external issues as a way to explain away their failure.

Of course, no two distressed businesses are failing from 100% identical causes.  Brownstein suggests a series of questions that you need to ask when you begin exploring a distressed business.

  1. What is the business’ potential value?
  2. Is there something of value under the problems?
  3. Under better or different circumstances, could the business be viable?

These are all questions that your business broker or M&A advisor can assist with.  It’s important to gain a clear understanding of the business’ past, present and future. 

Copyright: Business Brokerage Press, Inc.

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Considering Generational Strategies

When you are buying or selling a business, you might very well end up making a deal with someone from another generation.  Therefore, it only makes sense to take the time to understand that individual’s background and how that might cause behavioral differences.  It is important to understand and reflect upon where many of them are coming from and the collective experiences and trends that shaped their identities and perspectives.  At the same time, you can identify your own biases, strengths and weaknesses that may be caused by your own upbringing.

The strategies in this article originated from Chuck Underwood who is considered a leading expert in the diversity of communication styles between generations.  He is the author of a major book on the subject as well as host of the long-running “America’s Generations with Chuck Underwood” on PBS. 

Generational Sensitivity 

Underwood’s perspective is that people of each generation were molded by their unique formative years.  The decisions that buyers and sellers make will be impacted by their generation.  Mostly likely, the buyers or sellers you will be coming into contact with will be either Baby Boomers, Generation Xers and Millennials. 

Working with Baby Boomers

Baby Boomers (those born between 1946 and 1964) are a major force in the business world.  While they often possess a patriotic passion to improve the country, they were also witness to a time of great change via many movements including the civil rights and women’s movement. 

When you’re dealing with Baby Boomers, it is important to remember that they will want to build relationships and get to know you.  Common courtesy is very important to Baby Boomers.  That means they’ll expect you to show up on time and turn your phone off during meetings. 

You’ll want to keep in mind that older Baby Boomers may be experiencing hearing and eyesight loss.  As a result, you’ll want to keep your type and font size larger, and make text easy to read. 

When you’re working with your clients, it only makes sense to pay attention to the generation during which they were raised and adapt your approach accordingly.  Understanding generational differences will help you get a leg up on the competition while at the same time helping your clients achieve their goals.

What is Generation X?

Generation X (or Gen X) had a wildly different formative experience than the Baby Boomers.  Generation X is generally defined as being born from 1965 to 1980.  This generation spent its formative years from the 1970’s through the 1990’s.  In stark contrast the relatively more pleasant and optimistic childhoods of the Baby Boomers, Gen X had a rougher ride. 

America became more mobile during the time period during which Generation Xers grew up.  As a result, many children were uprooted and separated from their friends, family and hometown roots.  Growing up, these individuals witnessed a variety of scandals ranging from political and religious figures to sports figures.  Gen Xers witnessed the systematic dismantling of the American middle class and with it a general lowering of quality of life, opportunities and confidence in corporations.  In the end, Gen X was quite literally left home alone and lived as “latch key kids.”  It is no wonder that this neglected generation has some issues.

Individuals growing up during this time learned early on that they had to be ready to fend for themselves.  Since Gen Xers have been met with consistent and systematic disappointment and even wide scale institutional betrayal, this generation, on average, is more distrustful of organizations. 

Gen Xers are self-reliant and independent and one of their core values is survival of the fittest.  In his view, Gen Xers are self-focused, individualistic and want everyone to skip the nonsense and get to the point.  They have no real interest in getting to know you or playing a round of golf.

Working with Millennials

Millennials spent their formative years in the 1980s and early 90s.  They are a very optimistic and tech savvy generation.  They are also the most classroom educated generation in history.

It is also very important to note that Millennials are the most adult supervised generation in history.  So-called “helicopter parents” who work to protect their children from setbacks are the norm.  Employers find that Millennials are entering adulthood, but are still relying upon their parents to help them make decisions and even career choices.

Where Gen Xers are distrustful of the “wisdom of their elders,” Millennials actively seek out such advice.  Likewise, Millennials tend to volunteer a good deal and look for ways to solve the world’s largest problems.

You will find that Millennials will enjoy building a relationship with you.  Keep in mind these individuals tend to be quite socially conscious and they may very well expect you to agree with their views.  Additionally, there is a chance that they will have their parents involved in their business dealings. 

Keep in mind that the de facto tech addiction, or at the very least acute overreliance on technology, has led to issues with Millennials’ soft skills.  They can often lack the ability to read another person’s body language and adjust accordingly.

In the end, regardless of what generation you are working with, it is important that you continually adapt.  This will greatly increase the odds of cementing a successful deal.

Copyright: Business Brokerage Press, Inc.

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Essential Meeting Tips for Buyers & Sellers

The buyer-seller meeting is quite often a “make or break” meeting.  Your business broker or M&A Advisor will do everything possible to ensure that this meeting goes as well as possible. 

It is vitally important to realize that rarely is there an offer before buyers and sellers actually meet.  The all-important offer usually comes directly after this all-important meeting.  As a result, you want to ensure that meetings are as positive and productive as possible.

Buyers need to understand how the process of selling a business works and what is expected of them from the process.  Buyers also need to understand that following their broker’s advice will increase the chances of a successful outcome. 

Sellers should be ready to be honest and forthcoming during the meeting.  They also want to be sure to not say or do anything that could come across as a strong-armed sales tactic. 

Asking the Right Questions

If you are a buyer preparing to meet a business owner for the first time, you’ll want to make sure any questions you ask are appropriate and logical.  It is important for buyers to place themselves in the shoes of the other party. 

Buyers also shouldn’t show up to the buyer-seller meeting without having done their homework.  So be sure to do a little planning ahead so that you are ready to go with good questions that show you understand the business. 

Building a Positive Relationship

Buyers should, of course, plan to be polite and respectful.  They should also be prepared to avoid discussing politics and religion, which often can be flashpoints for confrontation.  When sellers don’t like prospective buyers, then the odds are good that they will also not place trust in them.  

For most sellers, their business is a legacy.  It quite often represents years, or even decades, of hard work.  Needless to say, sellers value their businesses.  Many will feel as though it reflects them personally, at least in some fashion.  Buyers should keep these facts in mind when dealing with sellers.  A failure to follow these guidelines could lead to ill will between buyers and sellers and negatively impact the chances of success.

Sellers Should Be Truthful

Sellers also have a significant role in the process.  While it is true that sellers are trying to sell their business, they don’t want to come across as a salesperson.  Instead, sellers should try to be as real and honest as possible.

Every business has some level of competition.  With this in mind, sellers should not pretend that there is zero competition.  A savvy buyer will be more than a little skeptical.

The key to a successful outcome is for business brokers and M&A Advisors to work with their buyers and sellers well in advance and make sure that they understand what is expected and how best to approach the buyer-seller meeting.  With the right preparation, the odds of success will skyrocket.

Copyright: Business Brokerage Press, Inc.

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