3 Ways to Enhance Your Credibility in the Business Selling Process
It takes a lot of time and effort to put together a deal to sell a middle market business. When these deals fail, it can be tremendously disruptive to your entire organization. Sometimes companies are on a specific timeline to sell and when a sale doesn’t go through it lowers the future price. That is why when you interact with a buyer, the goal is to ensure that you and your company are highly professional and credible. Here are three ways to enhance your credibility and avoid common mid-market deal killers.
1. Make Disclosures Upfront
When buyers are assessing a company, they are attempting to understand the ins and outs of the business as best as possible. As a result, buyers will want to see the strongest parts of the business as well as what is less than perfect. When sellers try to present too sunny of a picture, they can end up losing credibility. In fact, when a buyer sees a company that is presented with no negative issues it can be a red flag.
This is why any serious issues should be disclosed early in the process. Discovering major problems in due diligence can ruin a deal. Buyers end up feeling as though the seller is no longer believable if key information has been withheld. Plus, the due diligence process should be about confirming everything a buyer has been told, not evaluating whether the supplied information is valid or not. You can maximize your credibility and avoid these issues by making sure that any negative and potentially inflammatory issues are presented in the beginning; in this way, the buyer can properly evaluate these issues and even try to minimize their potential impact.
2. Maintain Consistent Messaging
If there are business strategies that will be communicated to buyers, it is important that all team members present a coherent picture. Make sure that everyone who will be communicating with potential buyers is on the same page. Consistent messaging is key.
3. Under Promise and Over Deliver
Another issue that can harm your credibility is falling short of forecast results. If you do not reach your year-end financial targets, this can scare a buyer. They expect predictability in revenues and earnings and will use that information to formulate their offer. That’s why it is essential to be cautious about presenting financial forecasts. Of course, buyers cannot expect you to be completely on target. It’s probably best to be conservative and leave a margin of error.
The best strategy is to over deliver and present numbers that are lower than what you realistically expect. This way, buyers are pleasantly surprised if your earnings are more than they expected. That’s far better than leaving them wondering why your forecasts were so high and your earnings so low.
If issues pop up that damage your credibility, it can be a red flag to buyers and damage a deal in progress. Follow these three strategies and you’ll be far more likely to keep buyers engaged and impressed.