Most people will purchase or sell only one business in a lifetime. Therefore, as business brokers, a large part of what we do is educate buyers and sellers about the intricacies of the process. People rely on us to help them understand the steps involved in buying or selling a business. They understand that the better informed and prepared they are the more likely they are to achieve their goal. Therefore, in the beginning stages, we’re the ones doing most of the talking.

When it comes time for the buyer seller meeting, however, our role is to make the introductions, be an observer, and be quiet for the most part. We may interject questions or comments when appropriate to guide the flow of information. This meeting is an important event for the buyer and seller. It is their time to understand each other’s objectives, establish a rapport, and size each other up.

An appointment for a buyer and seller to meet is usually made when a buyer is considering making an offer to purchase the business. The buyer would have already reviewed the business profile and financials, and asked preliminary questions that had been answered by the broker. It is common for business owners to require that all such meetings be during non operating hours to avoid premature disclosure to employees and customers.

This is the chance for the buyer to tour the facilities, to learn about the operations of the business, the employees, the growth opportunities, the financial aspects of running the business, and to get a feel for what it would be like to walk in the owner’s shoes. However, this meeting is not the time to discuss the price and terms of the sale. The business broker is the intermediary and will be the liaison for the two parties on that subject.

From a buyer’s perspective, purchasing a business is a huge financial risk – most likely the largest in their life. While they know they will have the right to perform all the due diligence they deem necessary, a healthy amount of trust is involved. The buyer must gain a sufficient comfort level about the seller, the business, and its sustainability under their ownership in order to take the proverbial leap of faith.

The seller, on the other hand, usually has their net worth tied up in the business. Typically, the seller has invested many years building and nurturing the business. Retirement may depend on successfully selling the business at a just price. In today’s market, even if a buyer is well funded, a lender may require a seller to carry a small note in order to reduce their own liability and exposure. This is a huge financial risk for the seller – most likely the largest in their life – just as it is for the buyer. In order to realize full payment, the seller has to trust in the buyer’s ability to manage and successfully run the business.

In our experience, the first meeting usually takes about two to three hours. First impressions will be made during this short period. Each will be making their respective judgement of the other and pondering the possibility of a deal being formulated. This is usually the time when the buyer decides if this is the business they wish to pursue. If all went well, an offer to purchase is tendered. If the seller accepts, the due diligence process begins.