If a business broker is doing their job correctly in terms of representing a company for sale, a seller should have the ability to select from multiple buyers. Multiple offer situations are common at IBA, the Pacific Northwest’s oldest business brokerage firm, based on the high quality projects we selectively represent for sale with knowledge, experience, and skill. It is common for our clients to be able to choose which buyer to sell to based on secondary & tertiary deal elements after price, as our market leading business valuation ability and detailed communication aptitude often has seller, buyer, accountants, and appraisers on the same page related to the market value of the entity.
It is common in buyer/seller meetings for the buyer to ask the majority of the questions, as they attempt to understand the history, business model, competitive landscape, strengths, and weaknesses of a company. It is always our recommendation as mergers & acquisitions intermediaries that an environment of full disclosure be created so that negotiations can be conducted from a position of knowledge on both sides of the table. The last thing either party wants, once they start spending significant dollars with professional advisors, is for the deal to fail based on information that should have been disclosed early in the process.
Money is often a motivating force for an entrepreneur selling their business. However, it is rarely the only motivation. Frequently, an entrepreneur will be part of the community where their business is located, the industry it participates in, and care about the welfare of their employees, customers, and vendors post transaction. The goal is not just to leave the transaction with a bag of gold, but also a successor who can successfully run the company, maintain product quality & customer service, support the families of the staff, and facilitate future growth and prosperity of the business.
This secondary set of transactional objectives creates a need for a business owner to draft a set of questions to ask while buyer vetting during the selection process associated with selling a business. The following is a list of questions commonly asked by entrepreneurs when interviewing potential buyers (Some can be assigned to a business broker as a surrogate):
- What is your net worth (signature power)?
- Where is your capital injection coming from?
- Do you require bank or seller financing?
- What is your credit rating? Can I review a credit report, if I am going to be asked to finance a portion of the transaction?
- Have you ever been an entrepreneur? Were you successful?
- What is the maximum number of people you have managed? What did you enjoy and what were your challenges managing people?
- How are you as a problem solver? Can you share a problem you successfully solved?
- What was your worst management decision?
- What resources do you have available behind you with relevant knowledge & experience?
- Are you a glass half full or empty person?
- Did you ever play competitive sports? This is one of my personal favorites. I believe athletic competition teaches lessons about teamwork, competition, life not being fair, and the benefits of hard work during adolescent periods of personal development.
- What were your favorite subjects in school?
- What do you do with your free time?
- What is the last book you read?
- What do you listen to in your car?
The bottom line is the best people to do business with are the ones you know, like, and trust. It is important to get to know the person on the other side of the table before you start negotiations. It is not uncommon for a business seller to select a buyer they like over another party. You only have one chance to make a first impression. Both buyer & seller should enter every meeting recognizing it as a sales opportunity and one where both individuals can walk away from the table and never return. Although, the strong preference is that both parties want to reach across the table and shake hands consummating a deal.
IBA has successfully sold more businesses than any other business brokerage firm in the Pacific Northwest. One of the attributes that has led to this achievement is a desire to facilitate “win-win” transactions employing best practices. If you are interested in selling or buying a business in Washington, Oregon, Alaska, or Idaho in 2023, we would welcome the opportunity to meet with you and provide an overview of our professional services. All conversations with IBA are held in strict confidence. 100% of IBA’s fees are performance based and payable upon completion of a project.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, legal, and accounting 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”.