Selecting a financial advising business to purchase requires due diligence and sound judgement. As the buyer, its often easy to manage your own emotions in the process and keep your head focused on the facts. For the seller transitioning away from the business they built, it’s a little more difficult to stay objective and clear headed in the process. As the buyer, it’s important that you understand and carefully manage the seller’s emotions in order to guide all parties to a successful outcome that satisfies everyone. Here are a few key tips to achieve that.
In any emotionally charged situation it is always important to validate the other person’s feelings and opinions, even if you don’t agree with or understand them. Your level of understanding or agreement does not dictate the validity of those emotions and opinions for another person. Even if they are flawed based on logic and facts, they are real and justifiable to the individual. By acknowledging and validating their point of view and feelings, you achieve a few things:
- You make the other person feel heard. When people feel heard, they move away from a state where they feel they need to constantly defend or reiterate their position and into a state of receptivity.
- You build trust. When people feel validated by the other party, they trust them more because they feel that the other party cares, is listening, and is more likely to make fair decisions and actions.
- You diffuse the situation. Validating and acknowledging the other person helps keep all parties calm and emotionally even, thus avoiding giving the reptilian brain opportunities to take over and hijack the situation and turn it into a volatile, emotional, and combative environment.
A great example of the power of validation as a tool for managing emotionally charged situations is the book Just Listenby Mark Goulston. In the book, Mark shares numerous examples from business negotiations to hostage situations, where listening and validating the other person helped to diffuse the situations and get all parties to a place where they could communicate calmly and clearly and reach a satisfying solution for all.
#2 Avoid Assumptions
Another critical error people make during business transactions is assuming facts and motives. For example, the seller asks for a price that isn’t supported by sound business appraisal practices. It’s easy to assume that the seller is greedy and trying to take advantage of an interested buyer. However, a number of other things could be, and often are, true. Perhaps the seller doesn’t fully understand the logic used to reach the appraised value and therefore does not agree with the conclusion of value. Or, again because it is more of an emotional decision for the seller, perhaps they don’t trust the buyer yet or are feeling the fear and sense of loss that comes from leaving the business they built from the ground up and are using price as a tactic to stall their exit.
They key is not to assume, especially not to assume the worst. Instead, it’s worthwhile to do some exploration and get at the heart of the issue. Stuart Diamond, in his book Getting More, shares some excellent examples and different strategies for getting at the heart of why someone is refusing to accept an offer or requirement. Often times it is something small and simple, such as needing to hold on to a piece of furniture, or a desire to stay on in an advisory capacity for a short period of time, or needing to trust that the buyer is going to respect for and care for the employees and clients of the acquired company. The key is to reserve judgment until you have thoroughly investigated and worked with the person to find out exactly why they are pushing back on things like price.
#3 Stay Calm
It’s easy to get caught up in storm when another person’s emotions are raging. That’s why it’s important that you as the buyer remain as calm and objective as possible. If you find your own emotions running away with you, step back from the situation and clear your head. If you continue to struggle with keeping your own emotions level while dealing with the seller, it may be worthwhile to bring an objective, uninvested third party to help mediate. An experienced mediator is skilled at validating each party’s point of view and getting at the heart of each person’s concerns and motives.
Overall, its critical to manage emotions during a business purchase to ensure a smooth and fair transaction for all parties. By validating the other person’s point of view, getting to the heart of an issue, and leveraging third party expertise as needed, you can professionally and ethically navigate any emotionally charged situation and achieve positive outcomes for everyone involved.