M&A Monday: Gameplan for the initial Seller/Broker call.

In a buyer’s pursuit of a business target, there is no moment as critical as the initial call with a seller (or seller’s broker). I have sat with sellers evaluating buyer offers and I know what they look for. Here is the game plan for how to ace the initial call with the seller.

First, ask for an initial call with the seller before submitting an LOI. It is always surprising to me that buyers do not do this.

When you have the initial call you should be laser-focused on achieving the following goals:

###-###-#### Create a human connection. This is the most important point. All other points are dependent on this one. Selling a business is more emotional than transactional. Sellers want to feel connected and comfortable with a buyer. I have seen sellers take lower offers from buyers they liked.

###-###-#### Find out what the seller wants in an offer. Although rarely done, this can be achieved by asking directly (e.g., I would like to craft an offer that meets your needs, what are the things you are looking for in a good offer). It also can be deduced by exploring seller’s family connections, hobbies, why they are selling, and seller’s financial situation. This will inform how you craft your LOI structure.

###-###-#### Show Seller you are professional. Unfortunately, there are many buyers that lack professionalism. Brokers can spot these people and shield the seller from them. In your initial call, find ways to display professionalism. If on a Zoom call with an older seller, be aware of your attire. If you have already identified a lawyer, lender, and accountant, mention your team's experience in M&A. Communicate that you have a team in place and are ready to move quickly. Drop hints about your background and professional abilities.

###-###-#### Present as reasonable and easy to work with. The Seller and broker are trying to find the best offer. However, often the best offer is not the highest one. The best buyer is one that will be reasonable and ensure a pleasant process. Make it clear that you view M&A as collaborative and you are not trying to take every dollar off the table.

###-###-#### Display industry knowledge. This can be a tough one for industry-agnostic buyers. Sellers speak their own industry language. If possible, you should learn enough about seller’s industry to show the seller you are knowledgeable about their business. Often sellers will be inclined to sell to buyers who are familiar with their industry. While it is not easy to learn the language of buyer, any amount of knowledge of the buyer’s business or industry will be helpful.

The initial impression you make on the seller will often determine your success in executing an LOI and being the chosen buyer. Keep these points in mind and you will ace that call.