Many people would not group psychology and business into the same category. Understanding that there is psychology and there are emotions involved in business will help you during the sale of your business. As a business major with a concentration in industrial psychology, I understand this very well.
One of the biggest challenges in selling a business is finding buyers who will buy. Buyers who will buy are truly serious about buying and are in a position to buy. By using these two criteria, you weed out about 98% of the buyers. Business brokers have ways to find the 2% of buyers who will buy, including NDAs, (Non-disclosure Agreements), talking to/meeting with seemingly serious buyers, and using both their gut and experience.
The qualifications of the potential buyers should begin with their finances, such as how much money they have to put towards the business and the availability of the money. Next comes the practical side. Does the buyer have the necessary sales, management, and business acumen? Sellers want to feel secure that their business will be left in good hands and that the business will continue on. Another factor in the buyer qualification process is the personal side. Are there any health, family, or legal issues that could affect the process? Cultural, generational, and personality differences also need to be taken into account. Communication needs to be as clear as possible to avoid misunderstandings.
An effective broker thinks about the psychology of the buyer, the seller, and anyone else involved in the sale of a business. Figuring out the motivations of each party, what motivates and why, is key. In addition, the fears of potential buyers when going into the process need to be addressed. For example, the fear of making a mistake, or making a wrong purchase, is a common fear. They oftentimes will want to know the reason for selling and business brokers need to be able to answer that with clarity. After qualifying the needs of a potential buyer and ascertaining a good fit between the buyer and the business, an effective business broker will educate a potential buyer by crafting a story in a way that will help the buyer envision taking over the business. The story will also include the future growth potential of the business.
Understanding and addressing the psychology and emotions of all parties during a business sale is an integral part of the complex process.
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