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  • Effective Communication in the Sale of a Business

    Nov 12, 2019

    Communication can provide direction, educate, and persuade.  Effective business communication can incorporate meetings, phone, video, static information on websites or in articles, email, and text.  Each type of communication has a place in a professionally facilitated business sale transaction.  The selection of an appropriate communication method can enhance the probability of sale where the choice of the wrong method can deteriorate clarity of message, create misconceptions, damage negotiations, and potentially “kill” a transaction.

    The following is an overview of which communication methods have the probability of achieving the highest results in a spectrum of deal progression points from the “sell side” perspective of representation of a company for sale:

    Business Broker Selection Interviews

    The selection of a professional M&A intermediary is an early step in the process associated with selling a business for an entrepreneur.  The best way to assess a professional’s knowledge, experience, and personal skill set is to meet with them in person. A meeting facilitates a comprehensive, dynamic conversation about the sophisticated, nuanced sale process associated with selling a privately held company or family business.  It also allows the ability to assess the business broker’s communication skills, appearance, passion, and creditability.  A secondary choice is a telephone conversation or video conference.  Business owners should remember that they are the customer when selecting a professional intermediary to sell their business. If it is not important enough for a business broker to meet in person with a potential client, “red flags” of concern should be raised regarding the intermediary’s level of interest or bandwidth for the potential project at the time.

    Business Evaluation

    The next step in most business sale processes after selecting a business broker or narrowing the selection process down to a few potential professionals is for the business broker(s) to evaluate the company to determine its estimated market value.  This step should involve a site visit and meetings and/or discussions with the business owner by the intermediary.  Confidential information will be shared during this stage, so trust & creditability of the intermediary and their firm should be assessed. This is best achieved in person.  Evaluation information can be conveyed in person, by mail, email, cloud based file sharing platforms, or fax.  Business valuation is a subjective science combining accounting, finance, and investment principles with the dynamics of the marketplace and the persuasive sales ability of the “sell side” intermediary.  “Seller Beware” of the party that tries to assess the value of a business virtually without a site visit and/or meeting with ownership.  A mental image of a business conveyed to a potential buyer by an intermediary can only obtain its maximum level of accuracy and persuasive presentation through 3 – 5 sense engagement with the business and ownership during the assessment stage.

    Market Creation

    The creation of a marketplace to sell a business incorporates development of marketing materials, advertising, email communication, conversations, and meetings.  The ability of a business broker to articulately and persuasively communicate in writing, on the phone, and in person has a direct impact on the quantity and quality of the buyers that engage to potentially acquire a specific company.


    Persuading a party to make an offer to purchase a business requires the ability to professionally engage with potential buyers and their professional advisers in meetings, on the telephone, and email correspondence.  A privately held company is a sophisticated, nuanced product to sell.  Depth of knowledge about the business, industry, and the mergers and acquisitions marketplace for similar companies combined with the ability to convey that information articulately and persuasively can be the difference between generating an offer and having a potential buyer pass on an acquisition opportunity.  Many deals have been lost in this stage by intermediaries who selected to employ a flat medium like email to communicate an important closing argument rather than meet or talk with a buyer directly.  It is also common knowledge that there is no replacement for knowledge, experience, and ability in professional, consultative sales.  Frequently NFL games are won by the team with the best quarterback.   Similarly, business owners who select the best intermediary achieve higher prices and more timely sales of their companies.


    Negotiations are often as much about listening to parties as talking.  Dynamic engagement by phone or in meetings with transaction participants generates specific answers to “who”, “how”, “why”, and “when” questions related to a deal.  Communication can occur via email in negotiations, but often explanations behind positions are truncated or non-existent and follow-up questions either provide insufficient information or are not timely. The advantage of asking a follow-up question in person is that the answer is received in a timely manner, the opportunity exists to “drill deeper” into the answer for clarification, and tone & body language can be incorporated into the assessment of the answer.   Complicated agreements have the highest probability of successful conclusion when discussions occur in person whether they are related to business sales, trade agreements like the USMCA, or a life commitment in “good faith” in an agreement between two people to get married.

    Due Diligence & Deal Facilitation

    Email shines as a business communication method in administrative situations. Email has several unique advantages as a communication method when due diligence, financing, legal documentation, and other transaction elements necessary to close the deal are being facilitated.   The advantages include the ability to convey detailed information, create a document trail of activity, and incorporate numerous parties in communication.  The incorporation of verbal communication to support email communication has the ability to enhance comprehension and knowledge of receipt.


    It is my opinion that text communication is inferior to email for conveying business written communication.   Text communication can be beneficial for confirming receipt of information and scheduling.   Text is an informal communication method best employed for connecting with parties in motion or for casual correspondence.

    Approximately 2500 years ago, Sophocles coined the phrase, “Don’t Shoot the Messenger” when conveying the concept that a party that carries information for another may not have played a role in the creation of the message.  This is a common scenario for a business broker negotiating the purchase and sale of a company.  It is equally true that a professional intermediary should be “shot” if they deliver a message inaccurately or without proper context and texture.  A “sell side” business broker is hired to facilitate a transaction at the highest possible market value in a timely manner employing “best practices”.  Similar to any peer professional (e.g., attorney, CPA, etc.), if they are not achieving desired messaging or goals, they should be changed.

    IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

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