Conference Calls with Buyers
Your conference call with a prospective buyer is a key step in any business sale. After your advisor has screened the buyer for a general fit for your business and for financial capacity, he or she will set up a call, ideally a video call for a more visceral experience, or a traditional conference call.
This call should be done prior to any in-person visit. In-person visits take much more time and resources when a simple call may make it clear it isn’t a fit before ever taking that step.
Rule #1 on any call: Be honest. This doesn’t mean you have to tell them everything that has ever taken place in your business—this is a sales call, not a confession. There are appropriate ways to present any particular set of bad information, but do not misrepresent your business. This will only create angst and distrust.
The main purpose of the first call is to get the buyer excited about the potential for your business and identify and address any obstacles or concerns the buyer cites, so you can relieve those concerns.
What do people want?
Each call should start out with the buyer telling you about themselves and why they are interested in your business. Once they tell you what they like about it, that’s what you focus on.
Any buyer’s top interests are: Can I run this business (transition); can I grow this business (opportunities); can I make money in this business (profitability)?
Transition—Transition is an important risk factor for a buyer—what happens to the business when you, the owner, walks out the door? You must be realistic—if 90% of sales go through you, then what? What’s your plan for the buyer to mitigate this risk?
Growth—Every business can grow. Be ready for ideas that offer an owner with new energy the opportunity to grow, and don’t discourage their ideas—their experiences and abilities are different than yours. Most owners are so focused on the day to day—working in their business instead of on their business—they lose sight of, or lose the energy for, doing more to grow, or don’t have the financial bandwidth.
Profitability—Not mentioned above is lifestyle. Just because you’ve always worked 80 hours per week or didn’t empower others in your business to do more, doesn’t mean it has to be that way. While some buyers are naïve about what it really takes to make a business successful, indentured servitude still isn’t high on their list!
Eat a little crow—We all have things we could’ve done more or better in our businesses. The sales process is never about the Seller’s ego. It’s about helping a buyer see how to create more opportunity in the future for your business under new ownership. Separate the sales process from your emotional attachment to your business.
The answer is never “No.”
That doesn’t mean the answer to a question is “yes,” either. It’s quite common for a buyer to try and feel you out on a call—will you carry back a loan? How long do you want to stay? How much do you really want for the business?
Ways to think about common questions:
- Growth—could I add “X” to the business, or could I do “Z”—The thing to remember here is it isn’t about what YOU think they should do or what you would do, it’s about what they might do or could do, and that’s their call. Could I sell elephants over the internet? “Sure, one of the great things is you’ll bring new energy, ideas, and experience to the business” (just kidding with the elephant example).
- Can I make (more) money? “One of the great things about this business financially is that it is pretty consistent and steady, and there’s more to be made. Even though there were a couple bumps in covid, we came through it really well. Our clients aren’t going anywhere, and we could market more aggressively.”
- Diversification— “A lot of your business is with one or two customers.”—They’ve been great customers and it’s why we’ve grown. There’s a lot of opportunity to grow beyond them, we just haven’t needed to and haven’t focused on it, but they aren’t going anywhere.”
- Related to 1 is the fact people want to feel excited about the business and what’s possible. I always recommend eating a little crow somewhere along the way—“Hey, there is so much opportunity in this business, whether it’s more aggressive business development with what we do now, more people in more places or even new market segments I haven’t thought about – I just haven’t really needed to pursue those things and have probably gotten comfortable, but there is a lot of upside.”
- The answer is never “no”—whether they ask if they could do X with the business or some deal parameter such as, “Would you stay for a year?” You may not want to and may or may not need to, but “no” would just put up an unnecessary wall right away versus, “what I want to see is a great transition that takes care of the people and the business. And I’ll do what I need to in that to help you. And we’ll deal with the specifics later. Pretty much any “will you” questions are answered that way, and in terms of a deal i.e., “will you carry a loan,” or consider an earnout is never a yes or no, it’s: “All of those things depend on the offer and the overall deal.”
- How much do you want for the business? “Anything that goes into offers and all that you’ll need to go through [Your Proforma Advisor].” Just deflect it back to your advisor.
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- Sometimes people ask this in a different way, “What do you want to see in a sale” or “what’s most important to you in a deal.” Great opportunity to say, “I want a great transition that sees the people taken care of and the business continue on and grow under great new ownership.” Yea, but do you want all cash at close? “Any kind of offer or structure is stuff you’d need to put back through your Proforma Partners Advisor,” or “anything like that will be considered in the context of the overall deal or offer.” Or even (on that specific one), “well, I think every seller probably wants cash at close (to establish the most aggressive deal position), but I’ll look at things in the overall context of the deal, and all that stuff needs to go back through your Proforma Partners Advisor.” Your first call with a buyer is NOT the time to give away anything on a deal point.
- Remember, always tell the truth, but the first call is informational, not confessional. You’ve worked hard to build a great business. Your first call with a buyer is the opportunity to share not just some basic facts and information, but your excitement about the business and its potential with the energy of new ownership!
By Don Beezley © 2025
Don Beezley is President of Proforma Partners, LLC and a Business Certified Appraiser (BCA) with over three decades of M&A, banking, and business operations experience.