Critical Buyer Concept – a buyer will ask 500 questions but they only want one answer.
“They want to know what the value of your company will be to them the day after they close.”
A seller can play defense by sharing the minimum amount of information possible and always responding in arrears to buyer inquires like a dog chasing his tail.
Or
A seller can play offense and be proactive by providing information before it is requested and answering questions before they are asked.
Which one do you think the buyer respects more?
If you want to go on offense, you will need a really good M&A advisor and not a business broker.
Where should your focus be if the buyers are on “the day after they close”.
It should be on the FUTURE and most sellers and brokers never illuminate their buyers about the future.
Sellers are fixated on telling the buyers how hard they have worked and what they have accomplished over all the years. All semantics. The buyer knows and respects how hard you have worked or they would not be engaging. They could not give a flip about all of the successes over the years except to validate the foundation that you built for the future.
Brokers are focused on providing the requisite prior years historical financials and waiting for questions. A completely reactive process that frustrates the buyer and does not provide any insights into the future potential of the company.
A proactive tandem of a quality seller and a quality M&A advisor will provide an entire path forward for the buyer. This path will include financial projections, growth models, sales funnels, product and service model changes and all other known and anticipated improvements and cost reductions.
Many sellers do not recognize that the buyer must model the future financial performance in order to justify the capital required to make the acquisition.
Why wouldn’t you take the lead on this so that the story starts with your version. This is a true power of the pen model. Either you write it and they validate and make changes where they see fit or they write it without much input from you. Which version is in your best interest?
Plus, think of what a pleasure you will be to work with and how much time will be saved by everyone throughout this progressive offering process.
I had a great CEO who always said “Get Out In Front and Stay There”. Pretty wise advice!