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 firstname.lastname@example.org
A typical first meeting between buyer and seller may take just a few hours, but the impressions made during this time can be permanent. Both parties are considering taking perhaps the largest financial leap of their lives.
At this point, the buyer and seller likely have some background information about one another but are still deciding whether to move forward. A well-orchestrated buyer-seller meeting can result in a buyer making an offer to buy a business, while a poorly planned get-together can leave a prospective deal dead in the water.
Have a plan
Outlining a plan for an upcoming buyer-seller meeting is crucial. Will the parties meet at a neutral location, or at the site of the business for sale? If a facility tour will be included, will the buyer agree to meet after-hours so as not to raise suspicion among employees? What do both parties hope to accomplish during the session? An ideal plan will specify a location, agenda, and goals. It’s wise to keep the dialogue as light as possible at this point. There will be plenty of future opportunities to talk about price and intentions if the initial meeting is a success.
Establish the rules
Sometimes buyers and sellers can get carried away during a first meeting and end up disclosing too much information. This may not be the time for putting on the pressure or discussing sensitive subjects such as price. The buyer-seller meeting is mainly intended to help a buyer determine whether to move forward with an offer, although it also can influence the future motives of the seller. Establishing some rules of engagement before the appointment — such as which topics are fair game and which are off limits, at least for the moment — can keep the conversation appropriate and on-topic.
Assuming the meeting is a success, what next? Defining expectations in advance of the buyer-seller meeting will allow for the next steps in the transaction process to proceed quickly and smoothly. In most cases, buyers already will have performed a good deal of financial investigation into the limousine or medical business for sale. Sellers already should have an understanding of what to expect from a buyer. The Tenney Group creates an expectation for buyers to present a letter of intent or term sheet within 48 hours of a meeting. The sooner negotiations can begin after both parties have confirmed an interest in doing business, the sooner a satisfactory deal can be reached.