A quality market is NOT ONE OR TWO BUYERS
This is one of the biggest mistakes sellers make. They think that if they have an interested buyer or two that they are in good shape.
Where did these buyers come from? Solicited or Unsolicited? Who is going to objectively qualify these buyers? How is it going to be determined whether the offers tendered are a fair value for the company?
Topic 8 fully covered why an owner should not attempt to sell their own company.
In today’s environment it is almost impossible for a legitimate business owner to ascertain who is even an actual buyer.
In previous years a vast number of companies and individuals hustled SEO services and duped countless business owners. Then Google thankfully shut down all of the nonsense and misrepresentation with the SEO activities.
Well, all of those disreputable people migrated to a new business model. LEAD GENERATION. Now these disreputable practices are amplified many times with the reach and power of AI. I refer to them as fleas on a camel.
I have 26,000 connections in LinkedIn so I am a wonderful target. I get at least 25 lead gen “opportunities” per week. So do legitimate business owners who are absolutely bombarded with unsolicited calls and waves and waves of cold call emails.
These are the same people that sell lakefront property in Arizona. They are creative, cunning and relentless. They have completely tainted the market so that a business owner has no idea what is legitimate and what is not (almost all). They spam as prospective buyers or that they represent interested buyers.
They make it very difficult for a legitimate firm like ours to distinguish ourselves because business owners are so over saturated with this bombardment of falsehoods.
The only real way to get real buyers is by working with a quality M&A advisor.
We have been averaging between 75 – 125 buyers expressing interest in our most recent offerings.
We have a three-dimensional approach to attract this level of buyer interest.
We confer with our clients and obtain a short list of businesses that our clients think may have an interest in their company. This may be associates, friends in the industry and even competitors. We also obtain a do not contact list from our clients.
We have a large database of buyers that are familiar with our firm. These buyers are identified by sector and subsector of interest. When an offering aligns with a known buyer, we give them what we call a “First Look”. This is not favoritism in any way. It is a professional courtesy so that buyer has the maximum amount of time to evaluate the current offering. They are very appreciative and respectful of this professional courtesy.
We list our offerings in all of the national posting systems. The thing we do differently is that we put tremendous effort and detail into our listing efforts. Most brokers put a vague generic listing out to attract the widest possible group of buyers. We take the exact opposite approach. We provide exacting details and substance that will immediately earn the attention of the buyers that align well with the listing information.
This process has two benefits. It prescreens the initial wave of buyers and it attracts more buyers because it is substance oriented which allows them to get a good sense for the value of the offering.
Our goal is to always make sure that we get at least five offers for our clients. We want our clients to have high quality offers to evaluate and accept.
If we start with 75 – 125 buyers expressing interest we narrow that list down to 15 before our clients ever engage in the process. We weed out all of the dreamers and tire kickers and qualify every buyer before our clients even know they exist.
We do not waste our client’s time. They are paying us to deliver high quality buyers with serious intentions. We then go through the next stage of buyer/client interaction to determine who will be submitting an LOI. We strive to get to 50% of the 15 participating buyers to submit LOIs.
It should be inherently clear that a tightly managed process like this will yield far better results than trying to work with one or two random buyers.
You worked so hard to get to this point. It is time to be very proud of your company.
Why wouldn’t you work just as hard to ensure a successful sales process?