If you’ve got years of experience with growing your business, selling its products or services to hundreds of customers, how different can it be to sell the business itself? Sales is sales, right?
Well, not so fast. The day-to-day experience of sales does have some commonality with the M&A experience — you’re connecting with folks who may be very familiar with your company and with folks who are not at all familiar, but have some good reason to be interested; the meetings are opportunities to “sell” and to address concerns similar to the “addressing objections” methods you trained on; there will (hopefully) be a purchase and sale agreement at the end. But the differences seriously outweigh the similarities.
- The M&A process is geared towards obtaining the best outcome in the single sale of a business — it’s not funneling to “qualified buyers” and then selling to all of them. There’s only one business to be bought. It’s more of an auction process, where potential acquirers learn about the business, do initial diligence and bid.
- It’s also a two-way street. You’re selling, but you’re also buying. It’s more of a courtship than you might think. Identifying the right buyer — and getting comfortable that they have the right people for your business — takes some time and should be a significant part of the process. They are interviewing you, as the person most knowledgeable about your business, but you are also interviewing them. You’ll have options and you want to be sure to invest the time in exploring each of the most interesting options before making a decision.
- There’s a ton of diligence between the “handshake” and the close. If you think sales is about befuddling the customer until they buy out of confusion, or backslapping your way to closing, you will have real trouble with an M&A process. Everything gets written down and everything gets checked, often by multiple people. It’s multi-functional — finance, IT, HR, strategy, legal — everyone gets involved. There’s a whole professional world out there organized around M&A.
There’s a big difference between the experience of selling products or services and selling a business you’ve spent years building. Some of those hard-earned sales skills will definitely come in handy — presenting to a smart audience and comfort discussing the business; listening; staying positive. But you’ll find that there’s more to selling a business than “selling”.
Alan Fullerton is a partner with Mirus Capital Advisors. He works with owners of middle market businesses and can be reached at firstname.lastname@example.org.