There’s a big difference between helpful information and too much information. It’s natural for sellers to get gabby talking about what they do best — running their business — especially when they are anxious about the possibility of a sale. But TMI can cause your buyer to go MIA. Here are some topics that have a tendency to make buyers magically disappear in minutes.
NO. 1: Downer stories
What’s more fun than listening to a stranger drone on about a horrible time in our history? Well, a lot of things. Before you start talking about the impact 9/11 had on your transportation business, think about how it will affect your buyer. An investor wants to make positive associations with your business. They don’t want to hear you reminisce about past hard times. All American business owners were affected by the terrorist attacks on the Twin Towers, whether it was directly or indirectly. Most of us have moved on. For the sake of your business sale, you should do the same.
NO. 2: Tales of tax evasion
If you’re going to talk to a potential buyer about all the money your business owes to Uncle Sam, you might as well stamp the word “liability” on your forehead. Bragging about the cash you’re saving by evading taxes is completely counterproductive. Buyers are interested in making lucrative trucking acquisitions, not cleaning up your major financial mess. If you want to receive a respectable price — or any price at all — for your company, it is highly recommended that you get help from a tax expert before taking it to the market.
NO. 3: Business complaints
Strategic buyers, such as competitors or industry vendors, will often be familiar with the pros and cons of the transportation business (not that they need you reiterating them, however). But a financial buyer such as an investment banker or private equity group interested in your company’s potential for profit may be fairly new to the transportation industry. Maybe you’re burned out or ready for retirement, but try to keep complaints about the economic climate or your transport business for sale to yourself. You want to play up the positive aspects of your industry, not overshadow them.
NO. 4: Personal information
Nothing makes a person squirm like having to hear the intimate details of someone else’s ugly divorce or unfortunate illness. Save the play-by-play for close family and friends. As mentioned above, making awkward associations with your company leaves a bad taste in a buyer’s mouth. This includes voicing political statements, religious opinions, racial comments, and jokes about lawsuits. Many sellers operate under a misguided notion that befriending a buyer will help make a sale. This couldn’t be further from the truth. You’re not at the barbershop; you’re trying to make a professional business transaction. There is never a more important time to be on your best behavior.
Remember, the goal is for your business — not you — to make a quality impression on the buyer. Trying to get too chummy will only create a distraction. Enlisting the expertise of an industry intermediary can keep communications neutral, pleasant, and, most importantly, effective.
Spencer Tenney, vice president of The Tenney Group (www.thetenneygroup.com), is a member of the International Business Brokers Association and a Certified Business Intermediary (CBI). The Tenney Group is focused on business sales, acquisitions, business valuations and exit planning exclusively in the transportation industry. Spencer can be reached at (817) 274-0054 or email@example.com