The Communication Essentials Of Selling A Business

Communication is the pipeline through which all business sales take place. If the pipeline is open and communication is flowing, your business is more likely to get sold. However, communication isn’t just people talking. Deal communications are verbal, non-verbal, written and visual. When these work well together buyers stay engaged and businesses get sold. However, when communications stop flowing, if it isn’t consistent, or it’s confusing and contradictory, deals can easily fall apart. Deal communication needs to be well crafted and well executed.

Communication with buyers first takes place through the initial marketing package which is a presentation of written and visual information.  This initial written and visual presentation of your business can influence why a buyer may choose your business over another.  In our work with clients selling their business we prepare:

Initial Marketing Package:

• Online blind advertisements which are listed on our, and other business listing websites. We refer to this one-page Ad as a Blind Circular. It gives the highlights of the business including annual revenues and cash flow. It’s designed to attract likely buyers without disclosing the name and location of the business being sold. It’s a quick teaser that we can send to our Registered Buyers who are already qualified to buy as well as new buyers interested in learning more.
   
• An Executive Summary Packet summarizing your business’s unique attributes, its history, strengths and opportunities and high level details of your business products and services, inventory, workforce, facilities, real estate and more. It may contain pictures, charts, infographics, and other visually appealing information. This package is only provided to buyers that sign Non-Disclosure Agreements and have been initially qualified as a fit for your business.
   
• A Financial Executive Summary Packet providing a deeper level of financial information is provided to qualified buyers requiring more detailed information to determine if the business is a fit for their needs.

As buyers review the Marketing Package, they are often in conversation with a BBG Business Broker, asking questions about the business to ensure it is an opportunity they want to pursue. The role of the Broker is to weed out the tire kickers and bring interested and qualified buyers through this initial curiosity phase before they meet with the Sellers.

After the initial marketing package has drawn in qualified buyers, the Buyers and Sellers will begin verbal conversations and buyers will request a tour of the business.

Initial Buyer and Seller Conversations:

The first Buyer/Seller conversations are ones that sellers should be prepared for in advance. Without preparation high-quality potential buyers can unintentionally be left with a bad impression of the business and/or the owners. In our article 3 Reasons initial Buyer/Seller Meetings Go Wrong we highlight the common reasons Buyer/Seller meetings don’t go well. Two of those reasons are a result of Sellers communicating the wrong information, or information at the wrong time, to potential buyers.

• Talking about the past. Unprepared sellers can easily fall into sharing stories about the past, talking about the long hours, problem employees, industry difficulties, and stressful times they’ve survived. While these can be badges of honor showcasing hard won battles and the trials business owners go through – they can easily scare buyers away. Initial Buyer/Seller conversations should be limited to information about your business today and how it’s prepared to grow into the future. Tip: Showcase your business as a great investment, not a difficult job.
   
• Giving away too much information: You should be ready to provide brief, high-level responses to buyer questions and ONLY answer the questions being asked. You’ll want to avoid giving too much of your business success information to buyers early on. Even though your buyer should have signed a Non-Disclosure Agreement by this time, consider your business strategies and customer information as precious commodities! Tip: Have a conversation with your broker about what information to reveal in the initial conversations with buyers.

Non-verbal communication: In addition to being mindful of what you say and don’t say it’s important to be aware of your body language when meeting with potential buyers. Naturally being warm and welcoming is important, as is being attentive and focused on what a buyer is curious about. Be mentally prepared to keep your facial expressions neutral – even if a buyer criticizes the condition of equipment or is pointing out what they consider to be the faults of your business. Expect buyers to find faults and do their best to uncover hidden issues that they can leverage to drive down the price or sweeten the deal for themselves. This is all part of the negotiations between buyers and sellers. By being mentally prepared to expect buyer criticism you can stay level and keep communication productive, all the while moving closer to closing the sale of your business.

Our Seller Insights online trainings prepare Sellers to successful navigate the process of selling their business.