Tips for the first face to face meeting with a potential seller?

May 30, 2024

by a searcher from IESE Business School in Barcelona, Espanya

I am meeting with a potential seller for the first time face to face. Any tips? for context, no deep previous conversations so far.

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Reply by a searcher
from University of Pennsylvania in Dubai - United Arab Emirates

As others have already stressed, the your goals for this meeting are (1) learn about their journey building the business and insights on potential. Engaging in the history allows you to learn about the competitive landscape and how it has evolved as well as the evolution of the business; (2) build a rapport with the Seller that can be built upon if you take this forward and (3) listen for red flags. In my experience motivation for a sale should be either be fairly evident (e.g aging without successors; health issues etc) or should not play into your analysis. it doesn't matter why they want to sell; it only matters why you want to buy and then you need to test your hypothesis. I would still ask the question and engage in the discussion but with the following motivations (a) as a way to initiate a discussion on what they would do with the business if they were not selling and (b) test the reasons why potential successors are not interested.

Reply by a searcher
from The University of North Carolina at Chapel Hill in Austin, TX, USA

I love deals falling apart as early as possible, so I generally would have already done at least a phone or preferably a video call with the sellers before investing time to visit in-person. In the video calls, I already demonstrated that I am a great buyer by doing research on the business, its customers and the industry to sound knowledgeable enough. So when the in-person meeting happens, I typically let the sellers do most of the talking and try to ask questions to fully understand WHY they are selling a profitable business. I typically pick a lunch meeting and talk about anything but the business for the first###-###-#### minutes of the conversation. Talk about their hobbies outside of work, family, (grand)kids, what they plan to do after closing, etc. Then ask them a probing question like why aren't they leaving the business to one of their (grand)kids and let them do the talking.

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