Merger and acquisition advisors work closely with clients to preserve the integrity of deals so they have the best chance of a successful closing. An often-overlooked aspect of the process is understanding and embracing human psychology. In this article, we will explore some of the most common ways psychology comes into play.
The Element of Time
It is critical that both buyers and sellers feel well prepared at every stage of the process. It is also essential that a certain momentum is established through every stage of the deal. When too many delays happen, this can start to derail deals.
Think About the Buyer and the Seller
Buying or selling a business is a life-changing event, for both parties. For this reason, it is important for you to invest time considering the perspective of the other people involved. Buying and selling can be stressful, so it’s important to take other people’s thoughts and feelings into account. You are not the only one who may be experiencing tension or concerns.
Consider Non-Active Partners
In some deals, non-active partners can pose challenges to finalizing transactions. They often have different motivations than the seller who is in the role of running the business. The best thing to do when two sellers are involved is to try to understand the point of view of each seller and help them both reach their respective goals.
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Influencers and recommenders can have a powerful sway over both buyers and sellers. By influencers, this could mean accountants, lawyers, relatives, etc. In order for a deal to go through successfully, often these influencers must be identified and their viewpoints must be addressed. On a practical level, there are also other people involved that can interfere with a deal, such as landlords. It’s important to make sure that these individuals feel as though they will benefit from the success of the deal as well.
In the sale of a business, many moving parts are needed to work in harmony to get to the finishing line. Human psychology plays a huge role in what decisions get made. It’s vitally important to take the time to consider what others involved in the deal might be thinking or doing. Your M&A advisor will benefit you by getting to know all parties involved and taking the appropriate actions to ensure things are done to everyone’s satisfaction.