Making the decision to sell your manufacturing business is a big step. Actually meeting a prospective buyer in person for the first time can feel like an even bigger step. That’s why it’s wise to prepare properly to ensure the buyer meeting goes smoothly. Here are some pointers on what to do before, during and after the meeting.
Before the Buyer Meeting
As Entrepreneur advises, it’s critical to know whom you’re meeting with. Is it the prospective buyer — or his or her broker or advisory team? Keep in mind that there’s a difference between the actual buyer and the team representing him or her. Representatives are more likely to be highly objective about your company, while the buyer might have a more personal stake due to professional involvement in the industry.
Discuss with your advisory team what you want to share during the buyer meeting. At this point, the buyer already has a high-level overview of your business. Now it’s an opportunity to provide more insights — including why you’re so passionate about your company. Furthermore, you should:
- Decide what to tell your team: As All Business points out, at this point, it’s still important to keep any mention of selling your business confidential so your employees don’t hear about it and leave. That’s why it’s best to tell your employees that the buyer is an insurance agent, potential client or an accountant. If the transaction goes through, you can tell your employees the truth and clarify how the transition will affect them.
- Prepare for the buyer’s questions: The buyer will have a lot of questions, so you’d best be prepared for them. Your broker should be able to provide you with a list of potential discussion points, for example about the company history, strategy and market potential, the competition and marketing. Additionally, the New York Association of Business Brokers provides a list of questions buyers should ask, including topics such as your biggest challenges and how well the business’s processes are documented. Accelerated Manufacturing Brokers also prepared a list of 101 Questions You Must Ask Before Buying a Manufacturing Company.
During the Buyer Meeting
If you’ve prepared properly, you shouldn’t run into too many problems during the meeting. However, there are still some points to consider so the buyer meeting runs smoothly:
- It can be a good idea to make your introductions in a relatively informal setting like a business lunch, where both parties can get to know each other a bit. This will help break the ice and can help you feel more at ease.
- It’s important to not let your emotions get in the way, as this could influence the buyer’s position. If asked, clearly state why you want to sell your business, and try to remain as objective as possible. It’s possible that the buyer might say something that upsets you or makes you angry, but if this happens, do your best not to show it.
- Inc. recommends giving the buyer a tour of the facility. This can be a definite value-adding activity, as it can be very enlightening for the buyer to hear about your business in your own words and help gain his or her trust. Plus, it gives you the chance to show the buyer what you’ve worked so hard to build.
- During the meeting and tour, allow plenty of room for questions. If you don’t have the answer to a specific question, say that you’ll look into the matter and your broker will follow up by email.
- Don’t shy away from speaking about challenges your business might be encountering. A buyer who’s really interested will find out anyway during due diligence, so you’re best advised to get everything out in the open. For example, if you’ve been having trouble breaking into a new market due to a lack of advertising budget, say so. The buyer might see solutions where you don’t have any — and that increases the potential of the business in his or her eyes.
After the Buyer Meeting
While you won’t be in touch with the buyer directly at any point in time except for during the meeting, it’s possible that you might have questions for the buyer that you didn’t have the opportunity to ask during the meeting. If so, you should relay them to your broker who can then contact the buyer for answers.
Rely on the Support of Your Business Broker
Meeting with a prospective buyer, sharing the details of your manufacturing business and answering questions about everything from sale price to employee retention is both professionally and emotionally challenging. For this reason, it’s always advisable to work with an experienced business broker who can represent you objectively before, during and after the buyer meeting and work towards getting you the best possible deal. That way, you can rest assured that your company — and your people — will be in good hands while you walk away with the sales price you deserve.