How to CRUSH Your First Seller Meeting
You have created your dream deal specification… identified some strong deals to pursue… and fixed an appointment to meet the owner.
Normally, you’d meet in person, but with the current travel restrictions in place this may not be possible. (For tips on building rapport remotely, read this.)
If you can meet the seller in person, here’s a quick-fire list of DOS and DON’TS to ensure you nail the perfect seller meeting.
Before the Meeting
For your first meeting, your goal is to understand the seller’s motivation to sell and the mechanics of the business:
- DO your homework. In order to build massive rapport, it is critical that you research the business and the seller. Has the business won awards or secured key new customers, accounts or hires? What do you like about it? What don’t you like? What would you change if you buy it? Call the business and pretend to be a customer. What is the customer experience? If I find things that impress me, I can compliment the seller. If I find things I don’t like, I can offer them as constructive feedback. (Telling the seller something they don’t know is a great way to add value and build rapport during the meeting.)
- DO dress for success, but be yourself. If you don’t normally wear ties, don’t wear one just for the meeting. Ideally, wear a jacket and shirt with trousers or smart jeans. A decent shirt and jeans are the minimum, in my opinion. Dress conservative and smart
- DON’T be late. Arriving 10 or so minutes early is the perfect timing. You don’t want to arrive super early and appear too eager, but absolutely do not be late. If lateness is unavoidable, call the seller and explain
- DON’T worry if the seller wants to meet you offsite. Until the seller gets to know, like and trust you, it’s not unusual to meet first in a neutral venue. Once you have built the relationship in that first meeting, you can go visit the business (either immediately after or in a follow-up meeting).
Yes, you will need to see the business at some point, but it’s not critical in the first meeting. Focus on building rapport and credibility with the seller.
When you first meet the seller, expect to spend at least 30 minutes building a relationship:
- DO listen more than you speak. This will help you get some insight on the seller. You are looking for clues as to their personality and interests in order to connect with them. I typically use sports, prior work, travel and family. Discussing these points (before you go anywhere near a business conversation) will quickly build rapport, which is critical. Once you have done that, the seller’s barriers come down. They are now comfortable with you and less guarded, and the business conversations are deeper, more emotional and more valuable to you.
- DO ask key questions. There are a lot of questions to ask in the business part of the meeting, but here my the top five…
- Why are you selling?
- How do you acquire new customers?
- Who operates the business if the seller isn’t there?
- What is the history of the business? (I love this question because it makes the seller open up and take you on a journey.)
- What will you do after you sell the business?
- DON’T forget about body language. It’s true that 93% of all communication is NONverbal. Our posture, tone of voice, eye contact, how we move our hands, etc. are all forms of nonverbal communication. Pay attention to what the seller is “telling” you with their body. Do they look sad? Excited? Nervous? Anxious? Does the seller rapidly blink when answering a question or touch their face? If so, they may not be telling you the truth!
- DO take notes. You should have a nice journal and a pen with you to take notes. NEVER offer to record the meeting. Also, have your pre-meeting notes and printouts about the business with you. This shows you are serious, professional and committed.
Again, the goal for this meeting is rapport, rapport, rapport. The stronger the rapport you build with the seller in the first meeting, the easier the rest of the dealmaking process will be.
After the Meeting
Once you determine that you like the business, the next step is all about the money…
- DO get the financials. If you are working through a business broker, you may have the numbers already… But if the deal came from networking, direct approaches, events, etc. (an “off-market” deal) then you need to get the business’s financials to be able to value it properly, structure a potential deal and make an offer
- DO follow up. Touch base with the seller again after a few days. Even if you decide to pass on this deal, it’s a good idea to stay connected. The more people you know, the more people in your network, the more off-market deals you will have access to
- DON’T get deal heat. Even if this is the best business you’ve ever seen, don’t laser in on this one deal. Remember, if you have no other options, you’ll feel like you can’t walk away from the deal. You should have several deals to play against each other – and don’t be afraid to walk away if a deal goes sideways.
And that’s how you nail a seller meeting.
Arrive early, look sharp and be well-prepared… Invest time building the relationship BEFORE you have any business conversations… And leave with financials so you can move the deal forward.
Easy as 1-2-3.
Until next time, bye for now.