Here’s my definition of a great deal: the buyer walks away thinking, “I might have paid a little more than I wanted, but I got a good deal.” The seller walks away thinking, “I might have hoped for a little more, but I ‘m confident I got a good deal.” And everyone thinks the broker earned his cut.
In my mind, the best deals are win/win; no one has to “lose” in the transaction. In fact, I’m not really comfortable working with buyers or sellers who are set on winning or making the other party feel like a loser. Those kind of deals make everything harder.
The due diligence process is so much easier of the two parties like and trust each other. The closing is easier, and the transition period is easier. In many cases, the seller is retiring from the business but not from the community. The company Is still associated with him, and he’ll be seeing his customers at the grocery store, out at dinner, and at church. His legacy is in the hands of the person he sold to, and if that person is bitter and unhappy about how the sale went, it will come back around to him through customers or vendors.
Likewise, it’s very possible that the new owner will have questions he’d like help with after the official transition period ends. Technical issues, vendor negotiations, questions on how to best handle a long-term customer or employee. When those come up, a friendly relationship with the former owner means he’ll pick up the phone and try to be helpful. So much easier than if he’s resentful and hostile.
So part of my job as a broker is to find two parties who can work together well during the sale process. I try to get to know their personal styles and the goals for the deal, and to the best of my ability, help them understand each other. If I have a buyer who has a thousand questions about the smallest details, I help the seller understand that every question answered gets us closer to the finish line. That attention to detail will be turned to running the business after the sale, making sure he gets even the small stuff right.
Once the parties are in the due diligence process, I help keep the communication flowing and smooth over differences. That’s where my understanding of both parties’ goals is helpful. I can let the buyer know if the owner’s biggest concern is how his employees are treated after he’s gone, for example. Or remind the seller that the buyer had a bad business experience in the past and wants everything in writing so he’s confident he won’t be taken advantage of again.
It’s my job to help them understand the “why” so they can get over their impatience with the “what “ and the “how.”
When both the buyer and seller can talk honestly about issues and find common ground, the transaction – and the relationship – will remain pleasant and friendly. That benefits both parties and takes stress off the staff of the company as well. If they’re concerned about the tension or worried about the outcome of the negotiation, they’re not going to stay focused on producing good work. They may even be planning to leave. That’s a loss for everyone (with the possible exception of the competitor who snatches them up.)
I help buyers and sellers set realistic expectations for the deal and stay focused on what they need (rather than what they had wild hopes for.)
The best deals make everyone feel like a winner.
About the author: Patrick Lange
Patrick Lange is an experienced HVAC-specific business broker with Business Modification Group based in Horseshoe Beach, Florida. He has a unique background in financial planning and has even owned an HVAC business himself. This makes him well suited to working with some of the most successful HVAC business owners in the country. Specializing in companies with 1-10 million dollars in revenue, he maintains a network of buyers and sellers in the industry. He has sold more HVAC businesses than any other broker in the United States over the last three years and is currently the President of the Business Brokers of Florida (North Florida District.)