60 Days to Close: The Mindset Shift Every Seller Misses

You know how you you go to the office

and you have a you know a certain

mindset of what I need to do today and

then you get distracted and next thing

you know the day is over and you really

didn't get to what you wanted to do and

you can't even remember what you did do.

So you go home that night and you sit

down and like what happened that day. I

want to explain to you how a mindset

shift is so important

when you're selling your company. Hi

everybody. I'm Keith D. President Osage

Advisors.

Welcome back to our podcast, the ins and

outs of selling a business. This week's

big hurdle. So, we're dealing with a

couple situation with clients that are

selling their companies today. And the

mindset is

when you're in a sales mindset getting

ready to get to a letter of intent and

then there's a mindset closing. What do

I need to do to close the deal?

It's very natural as owners

that you're somewhat protective

uh cautious

closer to vest when you're going through

the initial sales process because you're

likely doing it for the first time and

maybe the hopefully the only time

and so you kind of have to kind of

navigate the landscape. So that's that's

our job, right? That's always that's

what we do. We're we're helping you

navigate why we release certain

information, why we have these certain

conversations, what we should talk to

them about, what we shouldn't talk to

them about, how we present ourselves,

because we're selling the business, but

also selling yourself that the buyer

really wants this company.

But what happens when you get to that

buyer, right? You've signed a letter of

intent. You've you've talked to multiple

buyers,

you got the number, the valuation you're

looking for, the terms and conditions

are in place, and now you have a letter

of intent signed,

and now you have a window typically 60

90 days to close timetable.

So, at that point, and we're again,

we're we're having this conversation

with a couple clients now, is that

you now have a willing buyer

at the price that works for you, you're

a willing set seller, then now the

communication is going to ramp up.

Instead of maybe having a meeting with

somebody, now you're going to be

speaking with them regularly. You're

going to see them regularly either via

video and or in person.

And you have to kind of shift

Because transparency

is

critical

and communication is essential

during due diligence.

You can't put up roadblocks.

The buyer's going to come to you with an

information request and you're gonna

it's gonna you know it's you're going to

pull back and say, "Whoa, there's a lot

of information here. Do I really want to

give it to him?"

And the answer is if you want to do a

deal,

you have to give it to them. You got to

switch your mindset. It's like I want to

make this deal happen.

Now, there's ways of navigating the

release of certain information. It gives

you some comfort, but it's essential

that you are a committed party

to this because if you're not a

committed party and you throw up

roadblocks, the buyer's going to pull it

back and said, "hm,

what are they hiding?" Natural natural

reaction from their side. What am I

hiding?

Said, "Maybe I should rethink this." or

they're even dive deeper into your

information, into your records, into

your operations, into your personnel,

into your social media, into your cy

everything. They're going to they'll

take a deeper dive because they're not

they're almost a bit concerned that

maybe we're missing something. That's

the last thing you want to happen. You

want to produce the information they

want on a timely, efficient manner based

on the schedule that works for you, us

as as as your adviser advising you. For

example,

we had a conversation the other day and

the first thing the buyer say, "I want

to talk to your customers." No, we're

not there yet, right? Yeah, we'll

introduce you to our customers, but

first do your financial due diligence.

They call it the quality of earnings and

and the trade. Do your financial due

diligence. Get your report that your

accountant produces that you verifies

the sales and profitability so we're all

on the same page, right?

And then once we have that number and

we've accepted it and we're everybody

meaning the buyer and the seller has

accepted it and we're moving on to the

next phase,

we get into the next aspect. Maybe you

know I want to talk to your employees.

No, not yet. Right? We will open the

door to uh certain employees of the

company. Now again

you may have had certain key employees

involved in the sales process. So

they're they're attuned. But that next

level employee in the next phase, let's

get

let's get the legal documents working,

right? Let's let's let's make sure that

we have a consensus on the trans on the

on the contract

and then we say, okay, we have we have

we have the financial done. We're

essentially in good shape uh with our

legal documents, maybe a few open items,

but there's not a major hurdle, right?

We'll we'll find a compromised solution

that works for both parties.

Then

we'll have that conversation with

our customer, set up a call with them.

And a lot of owners are really nervous

about this part because oh, they know

I'm selling my business.

The reality is is those customers of

yours are getting calls all the time

from other suppliers, right, that are

selling their companies. So, it's not

unexpected. Sometimes it's uh it's it's

advantageous. Sometimes they're they're

happy to hear it. They're happy for you

as an owner.

But you can't hold back and just say,

"No, I'm not doing that." because that

will likely in most cases

you just just kill the deal right there.

You got to shift your mindset to a point

where okay, I have to be more

transparent and open and communicative

about not just

what I provide prior to LOI, but now and

now they're going to take a deeper dive

looking at the details

financial sales and marketing your

personnel.

And when you have those conversations

and you may wait to the very end before

you make an announcement

to your employees, some owners are more

transparent upfront and they disclose.

Others

wait till the last minute. That's your

call. That's your that's your decision

as a business owner. When is that right

time?

But it's important

have a mindset once you sign a letter of

intent that I am going to do what it

takes to get this deal done. I'm going

to provide the information necessary to

get this deal done. I'm going to time

that information out in a way that I'm

comfortable, but I need to provide it.

For example, like I said earlier, we

want to talk to your uh key customers.

And the answer is, "Yeah, happy to have

you call my customers, but you let's get

through financial due diligence. Let's

get through the legal documents. Let's

get closer to the closing date, and then

we'll have those calls versus saying,

"No, you can't call to my customer."

That's not that's not a that's not a

response to a buyer. It's all about

timing it in and and having that

conversation. And and usually the best

way to do that is through folks like us,

like Osage. We'll call the buyer up and

say, "Look, we understand you want to do

this, but here's what we need to do

first. Here's second, third, and then

we'll have that customer conversation."

That way, you're protected. Emotional

concern aspect of that is is is they

don't see that. You know, you run it

through us. Why do they need this? We

explain why they need this. We explain

and work with you on a timing of release

information. But you got to get to a

mindset is that this stuff is going to

be required. It's going to be necessary.

and it's going to produce the outcome

that I agreed to in a letter of intent.

So, think about the mindset. It's very

important. Have any questions, just feel

free to pick up the phone and give me a

call at 860-767-3273

extension 10001 or you can email me at

kdeoageadvisors.com.

Mindset's critical. Having a right

mindset to get the deal done is

imperative to your benefit.

Hope this helps. Thanks for being with

us.