Key Principle – The Buyer Is NOT the Enemy.
IF you are working with a high-quality, high integrity buyer, you have a lot in common. You both want:
- The company to do very well in the future
- The employees and customers to be treated very well
- The transaction being discussed to close successfully
There is only one key point of separation.
You want to sell your company for the highest price possible and they want to buy your company for the lowest price possible. Those are reasonable expectations by both parties.
This gap can be closed with mature focused conduct by both parties.
The real gap closer is to establish price equilibrium where the price being offered aligns with the value of the company being sold.
This is where a very strong, articulate advisor comes in. It is imperative that the seller and their advisor do an exemplary job of conveying the value of the company to the buyer.
A critical component of this value conveyance is conveying that the company has unique tangible and intangible values to this specific buyer. Selling a broom manufacturing company to a financial buyer is completely different than selling it to a company that is in the cleaning industry.
Many brokers try to sell companies based upon generic financials and operating metrics.
Those may or may not even gain the attention of buyers.
Conversely, a representation that includes specifics about the buyer’s company will certainly earn more attention and respect.
Example. If you buy this company, you will add 15,000,000 in sales in your sector with a 37% margin, 23 engineers with an average length of employment of eight years and your first geographic foothold in Texas.
You want to think for the buyer and get out in front with clear concise reasoning as to why they should do the deal.
Lastly, you want to treat your buyers with tremendous respect and accommodation through the negotiation and diligence stages.
The end game (goal) is to achieve a very harmonious closing which will lead to a gracious and effective transition from owner to owner.