The Importance of the Buyer-Seller Meeting

There are many stages in to successfully selling a business, but one that often gets overlooked is the very first meeting between the seller and the buyer.

While other stages such as marketing, negotiations and finalizing contractual details often get most of the focus, it’s actually the seller-buyer meeting that is one of the most important aspects of closing a deal.

The seller-buyer meeting can make or break a “main street” and lower- to mid-market deals.  Sellers and brokers alike need to be more focused on this step in the sales process because its significance is too great to ignore.

The Objective of the Seller-Buyer Meeting

In general, the overarching objective of the seller-buyer meeting is to allow both parties to get to know each other on a more detailed basis. It helps establish trust and the beginnings of a working relationship. While it’s a friendly meeting to talk about possibilities, it can instill the buyer with confidence and momentum about the business and instill the seller with confidence about the buyer.

The seller-buyer meeting is the first opportunity for the buyer to ask un-filtered questions about the business. Up until this point, there has been a buffer that has stood in between both parties — in many cases, a business broker.

Buyers should be encouraged to ask as many questions as they want about the business. This could include operations, financials, the reason for selling, employees or anything else that is a concern. The best buyers are the ones who are willing to speak up and tell a seller what they’re concerned about. Only then can the seller — with the help of the business broker — answer and quell those concerns.

Oftentimes, questions that go unaddressed and unanswered can be the main reason for a deal falling through. Sellers should want a buyer who really cares about the business. If someone is going to buy a business, they have to dig for information and ask a lot of questions. Over the years, we’ve learned to be concerned about a buyer who hardly asks any questions.

At the same time, the seller needs to learn about the buyer. What is their background? Reason for the purchase? Plans for the business? What is their creditworthiness?

The Business Broker’s Role in the Seller-Buyer Meeting

A business broker’s role in this meeting is to listen and learn. Oftentimes, a broker will end up learning even more about the business in this meeting than they knew through talking with the seller beforehand.

The broker should also watch for and correct misunderstandings between the seller and the buyer.

The broker should anticipate problems that might arise and help the parties turn any negatives into positives.

Lastly, the broker should be sure that follow-up items are followed through on so the deal can progress to the next stage.

Sellers are great at running their business, but they probably haven’t sold a business before.  Most buyers are also buying a business for the first time.  An experienced broker is the expert at this part of the deal, and as such, they need to help buyers and sellers through this (sometimes uncomfortable) process.

Tips for the Seller-Buyer Meeting

1. The broker should prepare a written agenda in advance of the meeting.
2. The seller should start the meeting (of on-site at the business) with a tour or walkthrough to break the ice.
3. The buyer should take time to the seller about themselves, their background, their motivation and why the business is initially attractive.
4. There should a quiet place for the buyer to have a business Q&A with the seller.
5. Any follow-up should be agreed to with timelines so to keep momentum.

The broker should encourage and foster open and honest communication – no sense leaving problems for later! Ultimately, the seller-buyer meeting is a great opportunity to take a transaction from the idea stages to deal negotiations.

Sunbelt Business Brokers of West Palm Beach provides dedicated business brokerage services for all of your buying and selling needs. Whether you are an established business owner nearing retirement and looking to sell, or an ambitious entrepreneur seeking your next investment opportunity, there is no reason to look beyond Sunbelt Business Brokers. Visit us at 800 Village Square Crossing, Suite 216 Palm Beach Gardens, FL 33410 or contact us at (561) 832-9222. View available Businesses for sale in South Florida.