Why automation won’t sell your business
The rise of the robots is challenging human supremacy in a growing number of fields. Recent innovations include robot teachers that can mark school homework in record time, an automated bricklayer that can lay up to 300 bricks an hour, and smart beds in hospitals that reduce waiting times by working out which beds are free.
But what about the world of mergers and acquisitions (M&A)? Maybe advisors like BCMS should be looking to cut costs and improve productivity by automating the business sale process?
Indeed, I have heard of other ‘sell-side’ advisors doing just that – punching SIC codes into databases to generate lists of potential buyers, then pinging out automated emails to see who bites. It’s quick and it’s cheap, so from a business owner perspective, what’s not to like?
The results are telling. Some advisors take on more than 1000 clients a year, but sell fewer than 100. Yes, they are cheaper to hire, but what’s the point if the odds of a business selling are that slim?
Even if a clever AI tool does match up buyer and seller, no one does a deal just because a computer tells you who to merge with. The nature of any transaction is much more intimate than that. There’s an impact on value, too: will you really get the best deal and best terms from an algorithm?
That’s why M&A deal-making is a relationship business. When it comes to valuations, buyers want to lower the price, while the seller wants it higher. Hard data and numbers are useful, but it’s the human element – intuition, experience and intelligent conversations with industry contacts – that ensures a successful deal happens at all.
For example, at BCMS, our researchers build long-lists of potential buyers, before manually assessing each one to get to a targeted list of 150-200 pre-qualified prospects. Our calling hubs in the US, UK and China are staffed with colleagues who speak 21 languages, allowing us to have meaningful discussions with buyers anywhere in the world. We call every single prospective buyer, personally, often in their native tongue, ask for their feedback, and record their comments.
With BCMS, when you meet prospective buyers face to face, it’s with a Lead Advisor at your side, who has coached you in negotiation training – including human elements like body language, objection handling, phrasing and even tone of voice. We meet with multiple acquirers, who know they are in a competitive environment, and can structure their bids accordingly. These offers are reviewed, revised and more often than not raised. The human element adds material value too.
When it comes to a deal, cultural fit is vital. You, as seller, need to know whether a buyer is right for you, your staff, and the future for your business – and that’s something only you can decide, personally. Selling is an emotional as well as commercial transaction.
A business sale is a once-in-a-lifetime event for most business owners, and demands tenacity, judgment, and personal service from a sell-side advisor. That’s why our clients are much more likely to sell with us than our ‘automated’ competitors.