Hey Sellers! Here are 5 ways to p*ss off a buyer.

Following on from my article titled “Hey Buyers! Here Are 5 Ways to P*ss of’f a Seller!” I decided to write this article because I have seen way too many sellers do small but significant things that piss off buyers and kill deals.    

Here are my top 5 ways to piss off a buyer:   

Old or Incomplete Data  

One of the biggest frustrations for buyers or Buy-side Advisors is the age of incompleteness of data. It shocks me to often see deals with data sets that are 6 months old and where sellers expect buyers to come up with binding offers. Old or incomplete data is just a massive waste of time.  

If sellers want buyers to not waste time and put forward their best offer, then sellers need to ensure that data is recent and complete.  

Hot Tip: Get your data complete! Be willing to share it and work with the buyer's requests!  

Unprepared  

We see this issue all the time! Sellers go to market wanting to sell and are then unprepared when the interest heats up! Some basic things should be put in place. A small data room for financial statements and core documents such as leases or key contracts. Buyers do not expect to see everything at the beginning, but they need to see enough to make a decision on whether to put an offer in and they will need to see everything. So, get it ready!   

Another area where sellers are often unprepared, is in the involvement of expectations in due diligence especially around commercial due diligence. Many sellers mistakenly treat the sale of a business as they would a residential property sale. Sellers must be prepared to have an increased load during a sale process. More people; More conversations; More often.  

Hot Tip: Time kills deals, so be prepared. Get everything organised and sellers, start early. Don’t wait until the last minute—having your ducks in a row from the beginning will help keep the process on track.  

Unrealistic Expectations  

This is an obvious frustration but one that could be easily avoided. sellers need to get the right expectations in order to sell their business. They should not be looking at the ASX for direct comparable, they should appoint experienced deal teams and should not see their business through their eyes but through the eyes of the buyer.  

There is no deal where everything is perfect. Compromise must exist in a good deal.  

Sellers need to recognise the position of their business and the likely price that it can command. They also need to understand that in Australia, the SME deal land is full of transaction structures that are not 100% upfront.  

Sellers need to ‘get real’ with their price and deal term expectations if they want to get a deal done.  

Hot Tip: Get advice from people who have experience and ‘get real’ about expectations.    

Indecision  

The biggest frustration we see is when sellers are indecisive on what they want. One moment they want to sell and then next they want to keep it. Indecision can make modelling; spending money on deal teams; and the whole process a complete waste of time.  

Sellers need to be certain about pursuing a particular outcome. If they want to sell, then they need to throw everything into selling. If the price isn’t what they expect, and their expectations are right then they can change their mind. In contrast, if the expectations are set right, and if the deal offer is good then the seller needs to be decisive in the selling process.  

For buyers, the worst outcome is investing hours into a promising deal only for the seller to become indecisive, causing the deal to wobble. This situation is frustrating for everyone involved and kills the deal trust. 

Hot Tip: Sellers need to be all in. 100% effort to a sales campaign.  

Inexperienced Team  

Ultimately the frustrations above can all be solved if the seller receives good counsel. Counsel from experienced deal makers in their space.  

We often see inexperienced advisors appointed. Accountants and lawyers who are known to the seller but who have very little experience in transacting in the scale or expertise that the deal requires. This actually hurts the seller as costs and frustration levels increase.   

Deal making is as much art as science and experience counts. Being able to advise your client on whether this is normal or not is important. If the deal team is inexperienced and is unable to advise their client, then the deal will be protracted and likely come to a stalemate over small items.  

A good deal team will change the probability of a deal getting done. This is good for the buyer and seller!  

Hot Tip: Experience matters. Sellers, get an experienced deal team!  

Summary  

There are some really easy ways to piss off a buyer but also simple ways to quickly build solid trust with them. 

Sellers, do what you say you’ll do, and when you'll do it.  

Don’t waste time, be prepared, ‘get real’ on expectations, be decisive and get the right deal team!  

If you want to have a chat about how WE GET SME DEALS DONE then reach out. I live and breathe this world, acting for both sellers and buyers in this space.