What talks louder than money? Try coaching!

by Patricia Fripp, CSP, CPAE
(Your chance to eavesdrop on a conversation between Patricia Fripp and her friend, mergers and acquisitions specialist Mike Sipe.) 
My friend Michael Sipe is a brilliant mergers and acquisitions specialist. Here's a great business tip he gave me that you might adapt to your own business. 
"We were involved in an acquisition search for a client I'll call 'Jane.' I became aware that an internationally famous giftware store was for sale through a general business broker. My client was very interested, but the broker had already received three full-price offers. 
"I could have just stopped there, but I had a good relationship with this broker and persuaded him that my buyer might be a perfect match. I knew a little about the seller and suspected he had not hit it off with any of the other potential buyers who just wanted to pay their money and take over. I had a hunch the seller might be interested in more than money. He had personally built up the business over the years, regarded it like a child and his business was an integral part of his identity. My guess was that, while he wanted to sell it and retire, he secretly hoped to continue to be an influence in the business and to be connected after the sale. The other bidders apparently had no interest in his 'interference,' once they owned it. 
"So I set up an interview between Jane and the seller. Jane is very intelligent and accomplished in her own right. She is a successful attorney and had also gained national recognition for her own varied business successes. 
"I coached Jane in how to act, and she did a magnificent job. During the meeting, rather than extolling her own virtues, she took notes and treated the seller with great respect. She listened rather than talked and brought out his fatherly feelings. Though she planned to introduce her own skills, modern technology and fresh motivation to the company, she indicated she would value the seller's continued input as she learned his specific business. 
"Most business deals, contrary to popular wisdom, are about more than money. As a buyer, you are actually a 'seller,' first of all selling the seller on why the business should be sold to you. Then you may need to sell the seller on the terms. You need to sell the employees on staying, the customers on continuing to buy, and the vendors on continuing to supply on the same terms. You also have to sell the landlord on renewing the lease, which can be the most difficult part of retail negotiations. 
"So I coach buyers up front about how to position themselves properly and create an environment where the seller wants to sell the business to them. 
"My goal is that after the first meeting between buyer and seller is to have both parties saying, 'I really want to pursue a deal with that person.' In Jane's case, I considered the background of the seller and counselled her on how to stand out from the other potential buyers. 
"At our first meeting, I told the seller, 'My wife and I are long-time customers of yours. I look at businesses all the time, but I can't figure it out -- what is the secret of your business? What is your magic?' Based on how he responded, I doubt that anyone had ever asked him that before. He was delighted to answer as Jane took notes, attentive to everything this master merchandiser had to say about running a retail operation. 
"He shared two of the greatest insights into retailing that I have ever heard. 'Mike,' he said, 'the first secret is that there must always be an 'element of discovery' when people shop. Our store layout is designed and the merchandise positioned so that people have to look for things. As they do, they `discover' unexpected treasures, and race with them to the cash register. So what looks like disorganization is actually carefully planned. There is method to my madness.' 
"'The second secret,' the seller continued, 'is to never forget the potato peelers. Although I scour the world for unusual and extraordinary gift items, things that you won't find anywhere else, and people come to our store solely because of these items, I never forget to stock the fundamentals. Not because people come here to buy them, but because while they are there, they notice a potato peeler or a spatula or cheese grater that they were planning to buy at a discount store. Because of our special environment, and the convenience of being able to buy the item now, they purchase at full margin. Never forget the potato peelers.' 
"We orchestrated a series of meetings between Jane and the seller as he instructed her in what and how to buy. She was learning everything she could and building a relationship. 
"When Jane was ready, we structured an offer that was significantly less than the offers already on the table and structured much more favorably to the buyer. The offer included a consulting agreement with the seller. The seller accepted! Jane had established a relationship with him and he was confident she would do great and take care of his 'baby.' 
"Jane bought the company and then made her own changes. She designed a twenty-first century store that incorporated what she had learned from the seller. When the seller came back, month after month, as part of his consulting agreement, he was astonished and pleased by the high customer-service level of the sales staff, by the exciting new atmosphere of the store, and by the growth of the business. 
"Part of the secret to matching a buyer and seller, is understanding that a sale is not just about the money. It is also about the chemistry between buyer and seller. 
"To create this match, research the participants and coach your clients so that the rapport gets established. Brokering should not be an adversarial situation. It's about matchmaking, moving the right buyer and the right seller together toward a mutually satisfying closure. It's creating an environment where each gets what they want. 
(1011 words) 
Copyright 2002, Used with permission of copyright holder. Patricia Fripp CSP,CPAE is a San Francisco-based professional speaker on Change, Teamwork, Customer Service, Promoting Business, and Communication Skills. She is the author of Get What You Want! and Past-President of the National Speakers Association. PFripp@Fripp.com , 1-800 634 3035, http://www.fripp.com  

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