For buyers who are serious about a particular business, meeting the owners is an important part of the sale process. There is a lot of value in meeting the owners before making the decision to place an offer on the business.
For many Kiwi business owners, selling a business is more than a transaction—it’s a culmination of years of hard work and personal investment. Likewise, buyers are often stepping into their dream of business ownership.
The first meeting is crucial as it is an opportunity for both parties to connect. These meetings allow the parties to appraise each other and determine whether you both have similar goals that align.
In this process, sellers want to understand whether the buyer has the skills, know-how and motivation to take on the business. The buyer wants to know first-hand how the business works “warts and all” and answer the question “Could they see themselves running this business?”
A successful initial meeting builds trust and rapport, and plays a part in influencing the perceived value of the business and laying the groundwork for future negotiations or partnerships.
Preparation
Working with a business broker ensures thorough vetting of both parties to ensure compatibility and saves time. Choosing the right location for a meeting, whether it is on-site or a neutral venue. Typically, sellers prefer to meet off-site to ensure confidentiality. At this meeting, it’s a good idea for sellers to share their business journey, milestones, and reasons for selling, offering buyers insight into the business’s history and potential.
Confidentiality is paramount. An NDA should be in place well before sharing sensitive information. Providing a comprehensive information memorandum allows buyers to arrive informed and ready for meaningful discussions.
Meeting Structure & Information Sharing
A well-structured meeting begins with a business overview, covering history, operations, and market position. For small businesses, discussing daily operations and the owner’s role is essential. Growth opportunities and the opportunity to ask questions to ensure clarity.
Transparency has to be balanced with confidentiality. Only essential financial data, any trade secrets, customer lists, and employee information should remain confidential until a buyer has signed a sale & purchase agreement, then more confidential information is made available during due diligence.
Next Steps
If there’s mutual interest, the next step for a buyer is to submit a Sale & Purchase Agreement subject to due diligence. It is important, prior to making an offer, that buyers consult with both their financial and legal advisors.
Whether you’re buying or selling, proper preparation and the right support team make all the difference. If you would like to find out how to successfully sell or buy a business, contact one of our experienced brokers at NZ Business Brokers.
