Retiring Business Owners Need Not Struggle to Sell Their Ventures

In the article, Shortage of Buyers for Retiring Vendors, in The Telegraph of 13th December 2010, Richard Tyler talks about difficulties that business owners encounter when they are looking to sell their businesses and retire.

He says that vendors struggle to find buyers for their ventures due to the uncertain economic environment and face closing their businesses instead or continue running their firms into their late 60s. Staff may also find it difficult to raise the necessary finance to buy owners out because of bank lending policies.

Although potential investors might not pay the multiples that we saw only 3 or so years ago, there are a few things that baby boomers can do to ensure their comfortable retirement:

• Business owners ought to start looking at Exit Strategies early in the process. This will allow them to set their goals and targets and monitor their business's performance
• Set realistic expectations in terms of the price they want for their businesses. When selling a business, most owners will engage the services of their accountants and business brokers. We often see overinflated prices whilst bidding wars commence; however, it is the seller that is left disappointed in the process as their business "sits on the shelf" for months or sometimes years
• Get an independent valuation carried out early as it will give retiring business owners a better understanding of the areas they may need to improve
• Vendors may want to consider selling their businesses to staff and should involve their existing management teams in advance to avoid a bitter disappointment when their staff cannot come up with the cash
• Engage professional services: business disposal experts, such as M&A lawyers, corporate finance specialists and business advisers will add value and help owners to get closer to their target price
• Review and streamline processes and systems in the business to make it more attractive to potential buyers. After all, investors would be more willing to pay the price closer to what the owners have in mind when the business is running "itself"
• There is also another option available to retiring business owners: Deferred Consideration. It is often more beneficial and profitable when part of the money is deferred for 3-5 years. The sellers will get part cash up-front and the remainder at the end of the term. This will remove the pressure on the buyer to raise the whole amount up-front, raise more confidence in the business they are looking to buy and make the transaction much easier

The Language of Sales: Will Your Customers Keep Buying From You?

Despite a shift in customer attitudes and behaviours, companies are still "talking down" to their clientele by telling them what to do in the hope to persuade them to buy their services or products.

When it comes to sales, those days are long gone. All it takes is a subtle change in your marketing language to produce noticeable results. A change in customer attitudes over the past couple of decades means that they have switched from needing external direction to deciding for themselves whether to buy or not to buy. They compare offers to each other in search for a better deal. In other words, they've gone from "compliant" to "decisive" — they no longer want to be told what to do and they are in control. But while many companies understand this shift on an intuitive level, they have yet to adopt the right language and approach with their customers.

Organisations that invest in research to understand exactly what makes a customer buy have had great success. They use the information to create their branding, design advertising campaigns and to train their staff on the exact language to use (or avoid) with customers — and they reap astonishing results.

So, what could businesses do differently to influence their customer decisions?

• Rethink your message: how you address your customers will affect your sales. Some companies are still touting themselves as "the best" or "the right choice". These firms essentially tell customers what to think and what to do, which is no longer an effective strategy.
• Put yourself in your customers' shoes: notice how you react when told what to do. What's your response when you're presented with claims that don't "hold water"? Don't you trust those organisation that keep on insisting how much they care about you through their TV adverts? How would you like to be approached instead and what message would strike accord with you?
• Review your language: apart from checking your spelling and grammar (and I've seen a few corporate blunders), review your marketing materials and look for examples of commanding and suggestive language.
• Fine-tune your sales approach
• Invest in staff training: once you have streamlined your language and your message, invest in staff training to ensure that you manage customer expectations versus your promise to them.
• Test and measure: listen to your salespeople as they talk to customers. Do they make suggestions or assertions? There is a big difference between "This is what I think is best for you" and "Here's what I would suggest/recommend for you to consider." The first is a statement and implies a command to the customer, whilst the second is a suggestion to consider.

Of course, customers' attitudes are constantly changing in many ways and the change from being told what to buy to being offered a suggestion or consideration is just one of them. It is still a call to action but in the way where customers come to a decision themselves (with your help). And even if you only address this one change, your customers will notice and appreciate the difference in your approach.