Why crucial decisions are never based purely on logic
Most of us like to think we make logical buying decisions. When you buy a house you weigh up the location, whether it has everything on your tick list and whether it will suit your lifestyle. If you’re torn between two houses you might even make a list of pros and cons.
But we’re all human, and ultimately you’ll make your decision based on emotion. Sure, you might back up your decision with facts, but ultimately your heart rules your head. It’s why Kirstie and Phil get so exasperated with the couples on Location, Location, Location – because they don’t make logical decisions.
Selling or buying is 80% emotion, 20% logic
It’s exactly the same when you’re buying a business and if you’re a vendor who’s selling a business. Clearly all parties want to achieve a good deal, and both parties may even have a particular figure in mind, but the decision on who to sell to is still an emotional one.
When we begin discussions with a business owner, one of the key things we focus on is what’s important to you. How will your life look after the deal is done? How will it change on the day of the deal, and what are your expectations down the line?
But this should be a win-win deal for both of you so it’s vital for you to build rapport with your potential buyer and get on their wavelength too. What do they want from the deal and what vision do they have for your business in the future?
Often we talk to owner managed companies, and usually the owner has built the business up from scratch. It’s your baby! So you’re not going to sell it to just anyone.
What’s important to you as a vendor?
You’ll probably be worried about legacy. You’ve built this business up and you want it to continue to thrive. You may have known your staff for a long time and want to be sure that they’ll be looked after. And, of course, you want to be sure the deal is going to provide enough cash for you and your family, so you can plan the future you’ve envisaged.
So this is why you need to explain to your prospective buyers exactly what you have in mind. Is speed important, is it price – is there a figure you need, or is what happens afterwards the most important thing?
If they don’t know, how can they structure a deal that ticks all the boxes for you?
We had a deal recently where it turned out that the most important thing to the vendors was that they’d have enough money to spend the summer months out in Florida, as one of them was in poor health. So our next question was, “How much money do you need to do that?”
For them the total figure was less critical than their ability to head out to Florida using the money they got on the day of the deal. The way the deal was structured was key. And we wouldn’t have known that if we hadn’t got to know them, built good rapport, and got to the bottom of what was important to them and why.
The selling process
We follow a set process when we buy a company so that this kind of information is never missed out and it puts you on the path to achieving what’s important to YOU.
You can find more information about the process we follow here:
At Fidelis, we are always pleased to hear from business owners who are looking to sell or exit their business. Wherever you are in the process, for a confidential, no obligation discussion please get in touch.
Contact details:
Telephone: 0161 410 7070
Email: theteam@thefidelisgroup.co.uk
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