26 Sep Tips on Educating the Seller
You must convince the seller that you and your company know what you are doing. You must also educate the seller on the market, transaction process, etc. so that his/her expectations are realistic and surprises are minimized. The following list includes some important topics to discuss with the seller.
• The seller must be serious about selling his or her business. Take the time to explore why he or she is selling. Why now? What will the seller do after the business sales? Who has the power to change the seller’s mind (spouse, partner, etc.)? Are they serious about selling?
• The seller must be convinced that the price and terms are fair – as you must be.
• The seller must be aware that the “marketplace” ultimately determines the price.
• The seller must understand the importance of giving you ALL information concerning the business “up-front.” And, yes, this includes any pending litigation, any licensing issues, etc. The seller must understand that surprises later in the transaction process can be deadly to the deal.
• The seller should underestimate the importance of the lease information.
• The seller should also be informed that structuring the price, terms and the down payment may be the key to selling the business.
• The seller should be encouraged to think about all the outside advisers he or she will be using and give you a list of them.
• The seller should also be educated regarding today’s buyers.