Selling Your Business – How to Give the Buyer a Tour of Your Business

Selling Your Business – How to Give the Buyer a Tour of Your Business[EXTRACT]
A key step in selling your business will be taking the buyer on a tour of your facilities. Here are the most important things you need to do when your prospects first visits your business.Warm up When you and your prospect first meet do not jump right into business talk.Spend a few minutes getting to know each other. Attempt to build a little rapport.A few personal questions (but not too personal) such as, Where are you from? Where did you go to school? Do you have any kids? These are a good way to get people talking about themselves.If the prospect wants to go into some detail about his children or his hobby – let him. It’s a good way for him to relax and get comfortable in new surroundings.Sometimes the best topic of conversation early on is to talk about his career and what type of work he is doing now. If he is perfectly happy with were he is in his job and career, he wouldn’t’ be sitting in your office. What does he dislike about his current job/business? Why is he looking to make a change? What benefits does he want his new business to provide?These questions can give you insight into what he wants – his hot buttons. Try to tailor your presentation of your business to his likes, dislikes, hopes and dreams. Try to show him, if it’s true, how owning your business can fulfill those hopes and dreams. (On a side note: it’s a good idea to use words like “own” and “owning” instead of “buy” and “buying” whenever possible)Though buying a business involves a lot of cold hard numbers it is still a very emotional event to the buyer. This may be something he has dreamed of doing his entire life. Think back to the time you first went into business for yourself. That mix of excitement and fear is the same thing your buyer is feeling. If you can get the prospect emotionally involved in the business, your job of selling will be much easier.

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If you are in a manufacturing or wholesaling business you may want to set up a display of some of your most popular products and demonstrate their use for the buyer.During this early “warm up” process you may want to share some information about yourself. Talk a little bit about your family. Why did you get in this business? If you’re retiring, what are looking forward to doing the most once you have the time? People like buying from people they like.Studies have shown that as little as 5 minutes of schmoozing/small talk at the start, can have a dramatic effect on the success rate of a sales presentation or negotiation.If your prospect isn’t very talkative or seems uncomfortable at the start of this warm-up process you obviously don’t want to force the issue. Use your best judgment about how long this warm up process should go.Some Key Points To Remember1.) Have a room set aside were you and the prospect can talk in private. If your facility is so small that there isn’t any place you can have complete privacy, you may want to consider moving to an off-site location once you have toured the facilities.2.) In order to raise as few questions as possible with your employees, try to minimize open discussions during the tour itself. Instead preview for your guest just what you are going to show him and then review it afterwards. It is in the private room, or off-site location, where the buyer can ask more detailed question about what you have shown him.3.) Try to customize each tour to suit the interests or hot buttons of the individual buyer. If it is a manufacturing facility, the buyer with the engineering background is going to be looking for different things than the buyer with a sales & marketing background. What’s right up the engineers alley might be Greek to the salesman. Don’t try to make one tour fit all buyers.4.) Accept the fact that that you can’t touch on every single aspect of your business in one meeting. It’s likely that the minute the buyer leaves your premises you will remember some positive feature or fact you wanted to share with him.You can always follow up immediately after the meeting with a “Thank You” e-mail to thank them for coming in and to see if they have any new questions. And then you can drop in one or two of those positive points you forgot about during the meeting.The buyer is likely to be overwhelmed with new information anyway. So resist the temptation to throw in the kitchen sink.Is Now A Good Time To Negotiate?This first face to face meeting with the buyer is certainly an appropriate time begin to discuss/negotiate the details of an actual deal.However, while your are actually taking the prospect on a tour of your facilities, you want to keep the discussion limited to the business itself: products, manufacturing processes etc. The last thing you want to deal with on the tour is questions like, “What is the minimum down payment you will accept”?

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Let the buyer know you will be happy to discuss these issues in private. But while on the tour, and immediately after, make sure that discussions are focused solely on that. When all his questions and concerns related to the tour have been answered and you are in private, then you can move on to discussing the terms of the deal.In most cases the buyer will not be prepared to get into detailed negotiations with you at this point – they have learned a lot of new information about your business that they will want to review.But now would be a good time to discuss with the buyer a timeline for when you would like to receive LOI from buyers, how much time you believe is reasonable for the buyer to conduct Due Diligence, and your target date for the closing.Lastly, you want to discuss what will happen next.I suggest you let the buyer know you will be calling in 2-3 days to see if he has any further questions. This gives him some time to review and consider all that he has learned while visiting the business. I would also send the “Thank You” e-mail mentioned above immediately after the meeting or that night and include one or two additional positive features that weren’t covered in the actual meeting.