What’s most important in a transaction, or just life in general? Is it money, legacy, what happens to others or something else?
The following story (i.e. case study) is about a potential buy-sell deal for a small business but it could easily be about getting a new job, securing a new customer or a personal relationship.
The business seller made it very clear – money was number three on the list of priorities. In a similar vein, I state money is not a factor until we get past the three most important elements to getting a deal done, which are:
In this case the seller’s top concern was the employees. They’d been with the firm a long time, were loyal and were all homeowners in the community. In a one-hour meeting, this came up three times. The seller wanted the key people to have the assurance of a job for at least two years, the same benefit plan, and the same bonus program.
Second on the list were the customers. This company has a policy of a human answering the phone during business hours. The seller said, “I want the customers to receive the same high-touch service. This means “minimal phone tree” to get to a live person.” He also stated he would make sure the buying company’s employees were compatible with his customers (and employees).
He summed it up by saying, “This must be a good marriage.”
Finally, it was the money. It had to be a fair price. But a lower price with the employees and customers taken care of is a much better option than a higher price if the additional money meant uncertainty about the employees or customers.
So put yourself in this position. What’s really important?
- If a business owner needs every last penny from the sale of their business to make the rest of their life, or at least their next great adventure, successful, perhaps they shouldn’t sell. Maybe they should grow the business because more profits mean a higher price and successful growth increases the price even more (you’ve proven it can grow).
- Is it legacy? Does the owner want to drive by in 5-10 years and see “his” business’s name in glowing lights? (This is also ego.) This means selling to the “right” buyer, not just one with more money.
- Could it truly be love for the people, both employees and customers? I once had an owner explain why she wouldn’t sell to a couple of her (specific) competitors by saying, “I will not have those competitors taking care of my customers.” Employees usually come before customers and often the key employees get an exiting bonus from the seller, job security (as per the story above), or are the key to the deal closing.
Job seekers want a company with the same values they have, not just a paycheck. Customers want a supplier that pays attention to them and those suppliers want customers who value their quality and service. In our personal lives, we hangout with people who have the same values and interests, often without too much thought about relative economic status.
Money is important, but a good fit is often better. Take a job for lower pay because the culture is so much better? Sure. Sell a business for less because it’s the right buyer? Yes (and the right buyer is the number one criteria all sellers should have). Life is too short to put money ahead of relationships, culture or doing the right thing.