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Groundrules for Meetings with Potential Buyers of Your Company

Appropriate Subjects for a First Meeting

 

The first meeting with a potential buyer is a nervous moment for any owner trying to sell his company.  It is difficult to predict every question a  buyer might ask, and to judge how much information to disclose.   Rest assured, after only a couple of meetings you will be handling it like a pro.

As a veteran of hundreds of these meetings these are the ground rules I recommend to clients:

Tone:  Remember this is a high value sale process.  A friendly, open but professional atmosphere sets up a level of trust.  The buyers will often be from your industry.  Take as much time as they need to explore people you know and swop industry war stories, just as you would at a first meeting with a potential customer.   Be as open with answers as you can without revealing truly sensitive commercial information.  If buyers feel you are being defensive they will think you have something to hide.  If you are unsure how to answer a particular question let your broker handle it.

Level of Disclosure:  This will vary from buyer to buyer.  With a direct competitor give away minimal information about specific customer relationships.  With a private investor from outside your industry there is advantage, and little risk, in providing sensitive information that improves his knowledge of the industry.  Even with a confidentiality agreement in place avoid disclosing information on specific customers, suppliers and pricing arrangements.  Pretty much everything else is fair game.

Asking Price:  We always tell clients not to put an asking price on the table.  I explore the reason for this in Should I Set an Asking Price for My Company?  At some point in every first meeting the buyer will push for a price expectation.  There is no advantage in giving in to this pressure.  Simply answer that you are open to sensible offers and happy for the market to set the price – or leave the answer to your broker.

Location:   It is best to hold first meetings at your own premises, if necessary after office hours.  Buyers can always be passed off as potential customers or advisors.  If there is nowhere at your premises to hold a confidential meeting hire a meeting room at a local business centre or hotel.  Only use your broker’s office if it is in the same town.   Follow any off-site meeting with a visit to your premises.  A visit to your company sets up another emotional link with the business as the buyer moves towards an offer.

 

If you are interested in finding out more about these and other issues relating to the sale of a private company one of our business sale experts would be delighted to talk to you in complete confidentiality. Click CONTACT ME to book an initial phone conversation or call us on 01604 432964.

 
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One comment on “Groundrules for Meetings with Potential Buyers of Your Company

  1. Pingback: The Main Steps in Selling a Business | Select Business Sales

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