CONGRATULATIONS! You and your advisor have found not just one but two “best fit” buyers who are qualified and serious about the potential of buying your business.
Your buyer has signed the NDA/confidentiality agreement, reviewed the preview materials, and probably had an initial call. If your business made it through these levels of the buyer’s screening criteria, you are doing the right things the right way.
Now your buyers(s) would like to visit in person. A qualified buyer who wants to proceed with a visit is investing their time in investigating the real possibility of making a deal with you. This is a positive next step and a great opportunity to get insight beyond the numbers* for both parties.
The purpose of these visits is:
- To meet the owner(s) and get a sense of his/her leadership style, culture, and the state of the business. This is the “intuitive” insight into the way the company works and how the buyer works.
- To review the history of the business, your accomplishments, goals, business plan, strengths, weaknesses, and employees.
- To tour the facility (if it is possible to do so confidentially – sometimes this means after hours).
- To visit or drive by several customers’ properties highlighting the quality and type of services provided.
*Make no mistake. A seriously interested buyer wants to see your financial statements, business plan, budgets, appraisals, and more. If you don’t have the information they need, you may be squandering the interest you’ve attracted. Get your financial and business numbers together NOW.
Note that before an LOI is presented and accepted, sellers typically do not release client names or addresses or employee names other than the owners’ names. Similarly, a seller would not agree to release their QuickBooks general ledger to anyone other than a qualified, committed buyer who is in the due diligence process. Sophisticated potential buyers usually do not want to receive more than a code for clients and a redacted employee list unless and until they propose an offer, and it is accepted. Due diligence will begin then.
Draft a simple agenda and distribute it to collect the buyer’s comments. Ideally, you should have time to break bread together during your time together while beginning or continuing your conversations (breakfast or lunch).
Keeping things confidential will probably require an off-site meeting place to start with. It can be helpful to have ready the plat of the survey or other overview materials (Google Earth) for the office and yard locations available as you start the visit and review the agenda. For the client sites, be sure to prepare yourself with answers to why you selected this client, the size of the client’s site and complexity, the type of services provided, by whom, for what amount, for how long, etc. Of course, you will have everything (office, yard, client locations) in tip-top shape before any onsite visit.
Your advisor should be with you for every potential buyer visit for several reasons. It is important that every interaction with potential buyers be controlled through your advisor to build that positive impression with the buyer. In addition, your advisor will provide you with pre-during and post-visit support and feedback. While you are presenting, your advisor will be watching the buyer’s reactions, keeping track of follow-up items that may be helpful, and chiming in as appropriate to provide insight into your company’s relative strengths.
Next week, I will post a list of the most common types of questions buyers ask in these meetings. In the meantime, if you would like to find out how likely it is that you could attract buyers and get your business sold to a qualified “best fit” buyer, please give us a call. We are specialists in helping landscape business owners prepare their businesses for sale, buy another business, and evaluate options other than external sales.
You can reach me at 224-688-8838 or [email protected].
We’re here to help you Harvest Your Potential!