Eventually, you will want your best prospects to visit your business in person so they can tour the facilities. A good site visit can go a long way in creating enthusiasm in the buyer and it can help to distinguish your business from all the other businesses that the buyer is considering.
You want to make sure that you do all the necessary preparation to make the visit as productive as possible.
You also want to make sure that you only conduct a tour of your site for the very best prospects.
Related: How to Qualify Prospective Buyers
Too many sellers make the mistake of hosting visits from buyers at the very beginning - before the buyer has even read their selling memorandum.
The proper time for the buyer to visit your business in person is after they have received your selling memorandum, had some time to digest it and ask you some follow up questions.
Not only will you save time and protect your confidentiality, but the in-person meetings you do hold will be much more productive because the buyer will be properly prepared when he arrives.
If you haven't done those things yet (such as discarding useless office equipment, cleaning up the reception area etc.) do them now.
From the time the buyer first hears about your business, they will try to picture in their mind what it actually looks like. This image is likely to be an idealized one - it will look in their mind's eye exactly how the wish it to look.
Obviously, you can't make everything about your facilities perfect, but you don't want that moment when they first lay eyes on your location to be a let down. So do everything you reasonably can to make the physical location as attractive as possible.
Pride of ownership is a big factor in the buyer's decision making process. While you are undoubtedly proud of your business, it's also possible that over the years you have let things slip a little when it comes to organization and cleanliness. If so, admit it and take steps to improve things.
Scheduling The Meeting
In most cases you will want to meet with your prospect for the first time after-hours or on the weekend. You want to be able to devote your undivided attention to them. The fewer interruptions the better.
However, it may be to your advantage to have the prospect see the business while it’s open - in the case of a busy restaurant or retail store for example.
If this is the case you can have the prospect come by just for a look. You can schedule a more detailed sit-down meeting later.
If the buyer insists on seeing the business while it is open (and he is a really strong prospect) you may be forced to conduct the complete tour during business hours. Just be sure he knows you are concerned about confidentiality and that he should not speak with any employees or customers about why he is there.
Make sure that when you sit down with the prospect for the first in-depth meeting that you will not be disturbed and that you have set aside plenty of time.
Nothing is more destructive than to have a meeting that is going well cut short because either of you has another appointment. Sometimes you can’t get that level of enthusiasm back that you had been able to achieve in a previous meeting.
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.
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 into this business? If you’re retiring, what are you 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 Remember
- Have a room set aside where 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.
- 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 questions about what you have shown him.
- 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.
- 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" email 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 to begin to discuss/negotiate the details of an actual deal.
However, while you 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"?
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" email 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.
About the author: Diane H. Wong is a content writer at domywriting.com. In this case, she has an opportunity to share her experience with others and keep up with advancing technologies.