After the small tasks of preparing your business for sale, listing it and advertising the listing for wider attention, you will hopefully be inundated with inquiries from interested buyers, whether over the phone, email or good old snail-mail.
Responding to these messages and requests can be one of the most crucial stages in securing a good sale for your business, for both finding a suitable purchaser and making sure the deal you make is water tight. Below, we have run through our top tips for replying to potential buyers to make sure the transaction goes through without a hitch.
A good first piece of advice is to respond to any enquiries as quickly as possible. Buyers who are ignored may get frustrated or even look elsewhere for their next acquisitions.
Though requests for further information or more detailed accounts can take you a few days to sort it, it is worth responding to requests immediately with a friendly acknowledgement of their message. Something like “Thanks for your enquiry. I should be able to send the information requested/answer your questions in the next 24 hours. Thank you for your patience”.
It can be worth offering up your phone number if not already available, as a conversation can cover more ground than email back-and-forth. This leads nicely on to our next tip…
This is easier said than done, but being able to differentiate a genuine lead from a timewaster is a skill that comes with time. Usually it is your preparation that will help you here.
One step is to specify the profile of an ideal buyer in your advertisement, with criteria including previous experience, key skills, availability of working capital or even a resume. Asking them in turn about their timescale for the deal or knowledge of your company’s industry can help determine this too.
Finally, it’s easy to do some digging on social media and other online platforms to find a little more about your potential buyers.
This is a good tip in general throughout the buying and selling process. As mentioned above, though email is a powerful and speedy tool to communicate with, there is nothing quite like speaking in person or over the phone to gauge a buyer’s character and get a good view of the deal.
From here, your aim is to move your business onto your potential buyer’s shortlist. This is best done by communicating effectively and clearly in a bid to set you out from your competition. As mentioned previously, quick responses are key here, as are your responses to specific information requests (more on that later), preparing for common enquiries, maintaining a professional approach and manner, and making sure your written communication is clear, unambiguous and accurate. That means use a spell-checker!
What to send
Determining what information to send to your buyer, and when, is another crucial undertaking. Be frank about what you are prepared to divulge, and when, and under what conditions, and your buyer will thank you for it.
From their perspective, a buyer will typically want more information than you’re willing to give to them. Sending over a full, 30-page report on your business straight away not only puts you in a vulnerable position, but is a document that could have more value for you further along the process. A “teaser profile” of your business can help pique their interest, engage their emotional and create further desire for your company.
A good step can be to outline when you are willing to disclose certain information in your advertisement to avoid any confusion.
Protecting your information
Buyers will want access to, for example, your sale memorandum early despite the fact it contains sensitive information. For confidentiality purposes it is crucial to get buyers to sign and return a Non Disclosure Agreement (NDA) before sending such information. Not only is this proof of your seriousness and a test of the buyer’s interest, it reduces the risk that trading accounts, customer information and other confidential information is leaked or otherwise abused. There are templates available online, which are a good start, but will require tailoring to your business, while electronic NDAs are possible to enable signing in mere minutes.
Be warned: if a signatory decides to break an NDA, there is little you can do to stop it. An NDA offers you legal recourse to seek damages and therefore serves as a major deterrent, however.