Best argument to convince potential sellers
March 10, 2021
by a searcher from Université du Québec à Montréal in Montreal, QC, Canada
Many potential sellers are not fully motivated to sell to a young professional without any direct experience in their industry.
What are your best arguments, strategies to make them understand that we are the right person to take over the business?
in Manville, Lincoln, RI 02838, USA
You may not be the most experienced, the most knowledgeable, or the one able to give them the best deal, but if they know, like, and trust you to do good with their company they stand a far better chance of exiting.
Firstly, know that you likely won't be able to get them to sell on the first call.
Your real focus when first talking with them is to quickly build rapport and a relationship with them. How do you accomplish this?
1. Mirror their phrasing and mannerisms. If you talk like someone it immediately puts them at ease and like they can be themselves. This will also inform you how to approach them. Are they someone who only wants to talk business and that's it? Or are they someone who is very personable?
2. Ask powerful questions and let them talk. Your ability to listen to them is the most powerful tool you have when building a relationship with a seller.
Even after you think they're done talking... Stay silent. Let the silence be awkward. They will fill in the gap for you to let you know they're done or confirm you're still on the call.
The truth is most people don't know how to listen these days. By truly listening to people you'll be far ahead of the game.
Some sample questions to ask:
What is it that motivates them get up everyday to go to work? Where do they see their company in the future?
What are their plans to get there?
What are their pain points?
One of my favorite questions to ask people comes in two parts;
"What is a question you wish someone would ask you?"
This makes them pause and think. They might not have an answer, but for people who DO answer? You just ask them the question they told you. It's very simple, but it's always been a hit with the new people I talk with.
These are the sorts of questions that will give you great insight and let you know what they NEED to be motivated. Perhaps it will even tell you if they'll never be motivated to sell.
Maybe their business helps them push for a cause they believe in and they want it to grow to be the next billion dollar company. Perhaps they're not really sure how to accomplish that though. other than doing what they've been doing.
Now you know how to frame your offer at the end of that call/in the next call. Frame it around what they told you they want and need personally and from their company. The more similar wording it uses to what they told you the better.
All of this won't guarantee you get a seller to say yes, but you'll either get much more consideration than another firm who simply tells the owner they want to buy them. Either way, you'll discover if the seller is someone you'd want to work with or not.
I hope this proves to be of some use!
from INSEAD in Sydney NSW, Australia
If you've approached them cold, and they are yet to consider a sale, then obviously you have a longer journey to navigate with them. If they have decided to sell, then you need to learn what they're ultimately trying to achieve and then demonstrate you are the one to help them get there.
One vendor I bought from simply wanted some cash for the business he had built and then time to retire, so he could stay fit and spend time with his family. He wasn't concerned with legacy, just transaction certainty and handover efficiency. I had to demonstrate I could give him that.
Another vendor had already picked the place they wanted to retire and simply needed a structure and pathway to yield sufficient returns to buy there. They were also very interested in the legacy of the product they had invented themselves. So we needed to structure an unusual transaction (with a longer runway) to ultimately help them buy their house for retirement and demonstrate that we could maintain (and grow!) their products in the market.
"Horses and courses", with the underlying message being, start by learning as much as you can about the vendors underlying motives...