Your First Contact With The Buyer - The Phone Call

Usually your first discussion with a potential buyer for your business will be by phone. To save time it's very important to use this first phone conversation to motivate the qualified buyers to come in to see the business and eliminate the unqualified.

Whether your calling a buyer who responded to a classified ad, or someone referred by your banker or lawyer, the phone conversation should be handled the same way. As mentioned earlier, qualified prospects will have many business opportunities to choose from. They're busy people. Realize that a good prospect will try to pre-qualify you over the phone just as you are doing to him.

To get control of the conversation you need to be the one who is asking the questions. If you allow yourself to be used like a reference librarian, the prospect will ask a long list of questions, getting as much detail as he can about you and your business. Many times this will lead to him eliminating your company from consideration.

The main objective of this initial phone conversation is for you to learn as much as possible about your prospect so that you can determine if it's worth your time to actually meet him!

Selling a business over the phone is impossible. You can only prescreen prospects and set an appointment with the most promising.

When a prospect asks a question, acknowledge it, give a brief answer and immediately ask a question of him. If you don't come back with a question of your own, your prospect will just ask a list of questions until he has all the information he wants. When this happens there is often no incentive for him to meet with you in person. You want the prospect to know just enough to get interested, but not so much that he thinks he can make a final judgment about your business without visiting.

Remember: the person asking the questions is the one who is in control of the conversation. Here is a list of some of the questions you'll want to ask a potential buyer in that initial phone conversation:

1. Tell me about your business background and experience

2. Why are you interested in owning this type of business?

3. How much research have you done on the industry?

4. How long have you been considering a business of your own?

5. What is your time frame for actually buying?

6. Are you currently employed or unemployed?

7. Have you ever been in business for yourself? If so, why did you get out of that business?

8. Do you have a partner or spouse who will be involved in the buying decision? (If they have a spouse try to get them involved as much as possible. If your prospect is a married male, he may tell you it is totally his decision whether to buy or not. He's lying! If you meet the buyer in person do everything you can to get him to bring his wife. Later on, when they are making their final decision, you want to have her on your side.)

9. Do you have at least $x amount of cash available to invest now? (having enough for the down payment isn't enough. The buyer will also need enough money to cover closing costs, working capital and reserves. So add your best estimate for these things to your down payment and make sure the buyer has it or at least can come close)

10. In the first year, how much profit will you need to take out of the business to live on? (you will have a good idea of what is realistic, if the prospect needs more profit to live on than the business can generate than you know you don't have a good prospect)

11. Have you seen your credit report recently? Is there anything negative on it? (Don't ask the more general question "Do you have good credit?" People will answer that question "yes" no matter what.)

12. If we come to an agreement on price and terms I'm sure you'll do a thorough due diligence investigation of my company. Likewise, when the time comes, I'll want to check your credit, work and character references. Is that O.K. with you?

With these last two questions, what they say is as important as how they say it. Nervous or noncommittal responses can mean they are not prepared or have something to hide.

Questions 1-3 are open-ended questions that will get prospects talking about themselves. Let them talk. You never know what you'll learn about their major motivations and their level of preparation.

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This article is excerpted for our newest special report, "How To Sell Your Business For More Money". For more information on how TheBizSeller.com can help you with selling your business by finding pre-qualified buyers, guaranteeing your confidentiality and never charging a broker's commission click here