The question of choosing a buyer is the most important to consider when selling a business.
There are two main types of buyers: those who are very interested in your business and are ready to invest hundreds of thousands of dollars in it and for others, your business may seem insignificant and hopeless. But the problem is that from the actions of the buyer is not always easy to understand who is not interested in buying, and who just weighs the chances and thoughtfully approaches the decision to buy.
There are different styles of the behavior of the buyer and of the seller and, the characteristics of buying behavior that affect the process of buying and selling. Understanding the buyer's motives and the psychology of the buyer is one of the main keys to achieving a successful deal. It will help you better understand the actions and decisions of the buyer, as well as easier, find an approach to it and more profitable sell your own business.
In this article, we will look at six components of a buyers' psychology that influence him when deciding on buying and determine how the seller has to behave to make a successful deal.
1. What makes the buyer buy a business?
Remember that in the final decision to buy a business, emotions and impressions are given an insignificant role; basically, the buyer relies on logic, clear calculations, and rigorous analysis, pretending to be objective.
However, at the first stages of acquainting the buyer with the business, subjective impressions are of great importance. The same business can be presented as a prosperous enterprise that stands out from the crowd for its investment attractiveness, or, in contrast, as a sluggish and not worthy of commercial interest.
It is one of the most important tasks for the buyer - being able to make the right first impression - after all, it affects what will happen next. The ability to arouse the interest of the buyer in a particular offer is worth a lot, but many sellers do not realize that.
The main task of seller sells to customer the benefit of the own business. A seller who is not able to give a clear answer to what exactly should force the buyer to enter into a deal is likely to have serious difficulties with the sale.
It is not typical for the buyer to seek out benefits in a particular offer. If this buying benefit is not presented, then, for the buyer's reasons, it is either not there or it is not sufficiently detailed.
To more fully demonstrate the views of the buyer, herу are some of his axioms, which too often the seller does not accept:
- the buyer will not pay more for the business than he can bring soon;
- the buyer is willing to pay only for the current state of the business;
- the effectiveness of any investment is determined by the accuracy of long-term forecasts.
Thus, the main task of the seller - at all stages of the sale - is to demonstrate and justify to provide customer benefit.
As practice shows, the seller's ability to properly tell about the business and convince the buyer of its value is precisely the most important on the way to a successful transaction.
Experts from an essay writing service believe that the ability to generate customer engagement is even more important for the entire process than having experience in selling a business, financial and legal literacy. Warmed up by interest, the buyer is ready to make serious compromises, overcome difficulties associated with a lack of experience in buying and selling a business, and, of course, admit certain business risks.
2. How a buyer sees the risks?
The buyer has a much higher level of risk than a seller. Therefore, the buyer acts in a completely different way - systematically, methodically, and without permission to make mistakes. For the buyer, a deal is an opportunity to increase his capital, but also an opportunity to lose it. Risks follow the buyer at each step, forcing him to weigh his every decision.
The business buyer is as critical as possible, inclined to make calculations based on pessimistic scenarios, weighing all the pros and cons, so the seller needs to dispel all the doubts of the buyer, answering all the questions that arise and giving all the necessary information.
3. How a buyer sees a position of a business in the market?
Unlike the seller who sees only his business, the buyer traditionally has more objective completeness of views regarding the current market situation.
Setting the goal of the most profitable investment for himself, the buyer is forced to familiarize himself with a large number of offers on the market. Checking a particular enterprise, communicating with sellers, and even reading an advertisement with a specified price - this is an experience that expands the understanding of the market. A potential buyer very quickly begins to understand how many of actual offers are there. Any buyer is looking for a profitable investment. The seller usually seriously underestimates the number of competing business-for-sale listings. This difference in perceptions makes it difficult to find compromises.
In this case, the seller needs to explore the market offer and show the buyer the attractiveness and advantages his business.
4. How a buyer sees pricing?
The buyer and the seller almost always understand the price in different ways. At the same time, it is consumer priorities that are the main conjuncture-forming factors in the market, because, in reality, a business costs exactly as much as they are ready to pay for it.
However, in contrast to how much the business can bring now, the buyer is much more interested in how much the business can bring in the future. The task of the seller in this situation is to show the profitability and potential of the business, growth opportunities.
Related: How Businesses Are Priced
5. How are the relationship and the credit of trust formed between the seller and the buyer?
One more important factor in customer psychology is trust. No matter how attractive the business may be, the deal will not take place if there is no contact between the seller and the buyer and if there is not some kind of credit of trust. And if the buyer is ready to put up with a lot of "irregularities" in the business and consider compromises, then the situation is quite different from the buyer's expectations of decency and responsibility from the seller.
Any suspicion that the seller is not straightforward can put an end to where the deal can potentially take place. The buyer is as critical as possible to any attempts by the seller to avoid a question. An open discussion of the vulnerabilities of a business only improves the trust relationship, while an attempt to mislead the buyer can instantly discourage any interest in buying a business.
The buyer's categorical refusal may be the result of a at the first sight harmless joke by the seller.
6. What a buyer expect from a sales strategy?
The buyer expects to meet an owner fully prepared for the sale, with a practically packed business, with a presentation, with a willingness to clearly answer at the most important questions about the business, and most importantly - with confidence that his business is worth the money.
The buyer always notices the seller's uncertainty. Ambiguity, indecision, inability to formulate the key theses of the attractiveness of your offer - all this can alert a potential buyer.
The most common precedent for disappointing customer expectations is a lack of clear answers to questions about the revenue and cost side of the business.
In order not to lose the buyer, a seller should thoroughly prepare before the meeting, learn the basic rules of communication with the buyer, and be ready to answer all questions.
Amanda Polanski is a prolific writer currently working at Mcessay and doing her best in order to create meaningful, creative and flawless articles. During her studies at Purdue University she realized that writing is not that easy as it seems from the first sight, but she decided to go further and became a writer.