If you sell a business, I warn you that buyers know that advisors play a very relevant role for the seller and there are some who will try to bypass them and speak directly to the company owner. This way, they manage to get as much information as they think useful or they even manage to pay less if the seller falls into the trap. The seller, being the final decision maker, cannot use the “fall back on higher authority” explained in the negotiation chapter and sometimes makes unnecessary or avoidable concessions under pressure from the buyer.
Each agreement comes with a set of implications and an experienced buyer sees things that you don’t see. By the time you realize, they will have already got a yes from you.
Once the conditions for the contract and a deadline to sign the contract had been set, the buyer asked to have a personal meeting alone with our client. In the meeting, the buyer asked to a 30% payment deferral and our client agreed. The next time we met with him he told us what had happened. When we asked him what guarantees they had given him for this payment he didn’t have an answer. He hadn’t gone into detail with the buyer and he soon realized what a mistake he had made not having his advisors with him when making concessions.
There are buyers who will try to tell the advisors that their client have told them such and such personally or will tell the client that the advisors have told something else in the hope of creating confusion, getting more information or benefitting more in the negotiation. For that reason, it is very important to organize and coordinate all messages.
In some cases a buyer tries to gain the trust of the client and encourages him to forget about his advisors, insisting that things will be smoother if they speak one on one. I recommend that you never fall into that trap. A trap set up without a doubt to negotiate with a less experienced persona in order to get a better price.
You are paying advisors, trust them and help them do their work.
You must insist that all information must be passed to the buyer via your advisors and that any questions they have can be answered by the advisors.
You must stay back and lead the process, letting your advisors get worn out during the negotiations and only turning to you if the negotiations get complicated and they need to use the method “fall back on higher authority”. That will be the moment for you to get into gear, cooling things down and solving conflicts.
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