12 Jul Using Psychology to Defend the Deal
In a recent BBP webinar, we were joined by Greg Kells of Sunbelt Canada. In Mr. Kells’ webinar, “The Closing Process-Preventing Deals from Falling Apart,” we covered Kells’ key thoughts, assembled from decades of experience, on what it takes to keep deals from falling apart. In this webinar, Kells provides a range of actionable tips on how Business Brokers and M&A Advisors can ensure that their deals successfully go through. As Kells points out, there is often much more to ensuring a deal will ultimately be successful than many can imagine.
Greg Kells is President of Sunbelt Business Brokers and has opened 27 offices throughout Canada and has served as president/chairman of a variety of companies throughout his career. His experience has provided him with numerous ways to preserve the integrity of a deal. Psychology is an often-overlooked aspect of being successful in the industry.
The Element of Time
Topping Kells’ key points that you should know is that, as Mr. Kells phrases it, “Time kills deals.” It is critical that you work to make sure clients are as well prepared at every stage of the process as possible. Kells believes that Business Brokers and M&A Advisors will want to keep the momentum going or risk having a deal fall apart very quickly.
Think about the Buyer and the Seller
A second psychological factor that Kells highlights is that you must consider the frame of mind of both the buyer and seller. For both parties, the buying or selling of a business is a life-changing event. For this reason, it is important that you invest the time to build relationships with everyone involved in the process. Business Brokers and M&A Advisors will benefit from realizing that the buying and selling process is stressful for both parties.
Really Get to Know Sellers
Kells believes that it is essential for you to know sellers extremely well. Business Brokers and M&A Advisors should understand what is important to them, their families, their spouses, as well as non-active partners in the business. Non-active partners will often have very different motivations. As Kells notes, “Be really careful if the non-active partner doesn’t have the same motivation as the guy running the business, as that non-active partner will try to kill the deal because they don’t want to kill the cash cow.” Kells continued, “Two sellers with divergent goals poses a real problem.
You need to get to know each seller early on as well as the recommenders who provide them advice.” Once again, the factor of human psychology is at the forefront of Kells thoughts. The simple fact is that a non-active partner, who is financially profiting without putting forth much work will be reluctant to sell.
Identify Influencers
Kells points out that you simply can’t ignore key influencers and recommenders, as they can have a powerful sway over both buyers and sellers. In fact, he recommends that it is vital for Business Brokers and M&A Advisors to identify influencers early on in the process, whether this is an accountant, lawyer, “Uncle Fred,” or anyone else. Once those recommenders are identified, they must be worked with. As Kells states, “You have to build enough trust and respect early on that the seller values and follows the advice that you are providing.”
There are many moving parts needed to get to the finishing line. Human psychology plays a huge role in what decisions get made.
