Included in the list of skill sets a successful business broker must have is that of being a top notch detective. We have to constantly be asking questions from the first time we communicate with a seller or a buyer all the way through closing. We need to listen to the answers and then, thinking on our feet, we need to ask more questions based on those answers. And then ask more questions. Too many business brokers or salespeople in general, have a tendency to do too much talking and not enough listening. When you listen, you can then ask the important questions. And after conversations with either buyer or seller, a few moments might be spent to review what you have just learned, and what else you think would be helpful.
We have to know so many details and we need to understand motivations, which can be critical to the actions and response of sellers and buyers. And we need to “take their temperatures” on an ongoing basis to make sure their motivations haven’t changed.
Business brokers need to be aware that oftentimes our sellers and buyers don’t really understand what is going on or the implications of certain issues. And they give us their decisions based on that lack of knowledge. Not only do we need to continue educating them throughout a transaction, but we need to ask if they fully understand what we are talking about. There are situations where our sellers or buyers don’t want to appear to be ignorant, so they don’t say anything. Again we need to ask if they understand or should we explain it again.
It is often recommended to use a printed form or checklist (particularly in your initial screening) for both sellers and buyers to help you ask the right questions and get the information you need.
Personal issues like health or impending divorce can be key to seller and buyer motivations. But how far can we go before we are too intrusive? Obviously, we have to be sensitive, but to ask something like, “are there any personal issues that may affect this transaction?” can be helpful in asking the right question to find out what is really going on.
It’s difficult to know everything about the parties to the transaction and the business itself. And sometimes they may have reasons not to disclose to you. And other times, they just didn’t think it was an issue and you didn’t ask. It’s not always easy to think of the right question, yet many times they are trying to hide certain information.
The war stories of all the surprises in a transaction never cease to amaze us all. And when we look back, could we have been more prepared had we asked the right questions? Asking questions or “probing” is a skill. You need to practice. You need to get good at it.
In negotiations, we all know that knowledge is power. When you understand the real situation, your negotiations will be more effective. Certain information can make a real difference as to the negotiating position of the buyer or seller. Being a good detective – asking questions and listening to the answers will make you a better negotiator and help you to close more deals.