Business Broker Confesses -My Pet Peeve

POSTED IN Negotiation, Recommended Reading, Selling A Business

As a business broker am I doing something wrong with my vendors?

The best business advice ever we can give you when it comes time to sell your business to an interested buyer…

Only answer what is asked of you. Truly, its that simple!

For some reason some of my vendors over the years just dont seem to get this. We know (and understand) that this can be challenging for most vendors especially when they have in front of them the perfect buyer and they are keen to sell their business to them. Through selling our own businesses we know that feeling when your business is on the line and you've got an interested business buyer, you can't help but over talk a little bit too much about your business. The danger here is twofold:-

  1. You will inevitably say too much and bring up objections or concerns that the business buyer may never had considered before (we see this happen all the time), and
  2. You will actually oversell it and turn your business buyer off

With our business mentoring this is how we actually coach our clients word for word on this critical point:

Only answer what is asked of you. Just sit back. Relax. Listen really carefully to what the business buyer asks and shut up. Only answer what they ask -other than that, shut up!

Hopefully this simple advice is easy to understand! I have noticed that some of my vendors still don't seem to get it, but my hope for you is that you DO get it! Believe me -I have seen this one make or break the sale of multi-million dollar businesses many times. (it is painful for me even thinking about it!) I will say it again, simple, but break it at your peril – as business brokers we have seen plenty of business sales tip over because of this.

One important clarification needs to be made here: we are not trying to with-hold business information. This is not what it's about. You always tell the truth. You have to answer honestly your business buyers questions because they will eventually find out the truth anyway, so dont withhold anything, especially if the buyer is experienced and a smart business buyer or operator. BUT, and the big BUT, if they don't ask it, don't volunteer! It's not important at this point. Because inevitably, you will say something wrong and potentially put doubt or put them off the business in some way or you'll give away too much negotiating information.

What I think is going on: As a vendor you will more than likely be highly emotional about the sale of your business, and emotionally attached to the outcome of the sale of your business. This can be challenging at first when it comes to knowing what to say and most importantly what NOT to say. As I said earlier Liz and I have been there ourselves. I remember when I was selling our first business, it's a bit scary (lots of emotions) and we definitely over-talked and said too much. But the way to combat this if you're in that position is: ONLY ANSWER WHAT IS ASKED OF YOU!

And if you can't remember that one, then that leads us into our next inside business tip… (again, nice and simple!)

Matt and Liz's Inside business tip: Keep asking the business buyer questions

If you need to say something, which you will more than likely do on your first meeting because you'll be nervous, (nearly every vendor does this so dont feel too bad!) just start asking the buyer questions. Just simple questions such as:

  • Why they want to buy your business
  • What they're going do with it, what their plans and dreams are for it
  • Do they know how to run it?
  • Do they know anything of it?
  • How long have they been looking at buying businesses?

So to repeat: Most importantly, if you need to say something, make sure it's a question to them. This is the best way I know to avoid saying too much and it has the added important advantage of helping you qualify your business buyer and finding out what the buyer is looking for which will become more important as your business sale progresses.

If you're game, why not share your experiences with us below if you have ever experienced someone (maybe yourself or your even your business broker!) speaking too much when trying to sell your business.

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