Psychologically preparing our client

Until now, we've only told clients we're the best and most experienced – it's time to prove it. The data and its interpretation within the deal is our sweet spot, where we're most knowledgeable and comfortable. It must be our primary focus so we can start crafting the story, and find those value-building nuggets. We dive in, preparing clients to gather contracts, financial records, and product information. For many, this is the first and only transaction they will ever do. While we’re preparing for the transaction, what can (and often does) get ignored is its psychological and emotional impact. An overwhelmed client can jeopardise a transaction.

Educating clients

Education is vital in preparing clients for what's to come. Our job is to ensure they understand the who, what, and why of each step in the process, the rationale behind requests, and the information they will have to share. Doing so reinforces the growing trust between client and advisor while helping the client prepare mentally.

For many, the entire process consumes more time than they ever expected. They’re busy executing their day-to-day job, and now the investment banker, accountant, lawyer, and buyer will make multiple, repetitive data requests. Providing insight on these demands well in advance can help clients prepare, and more importantly, set the right expectations for the project.

We also need to go a step further by providing insight into the perspective and approach of a buyer. We must help our clients understand the buyer’s intent, reminding them that sellers are optimists, and buyers cynics.

Our clients are primarily entrepreneurs and shareholders of closely held businesses, and the company likely represents a lifetime's work or generational accomplishment. Everything is personal, with family identities and values interwoven with business assets and processes. Typical due diligence inquiries and analyses can feel like an attack on integrity, a questioning of their veracity, or a lack of understanding of the business itself. The results can be devastating without adequately educating our clients on a buyer’s approach, psychology, and objectives.

As we peel back the curtain and clients see how the transactional sausage is made, it can be scary. As active industry professionals, we understand the process, and while we realise none of it is personal, our clients may not. So, just as we advise on market terms or valuation, we must help clients keep emotions in check and help them have objective rather than emotional reactions.

Does this seem like overkill? It's not. We are our clients’ advisors – it's our responsibility to care for our clients’ emotional and business readiness for a successful transaction by preparing them before they board the emotional transaction rollercoaster.