A “love-hate relationship” refers to a strongly emotionally ambivalent relationship. It is a state of conflicting desires, feelings, and thoughts that coexist simultaneously and lead to inner tension. Even in a business sale, the seller and buyer often find themselves on an emotional roller coaster. This is frequently due to differing goals. Our goals are usually driven by unmet needs. Goals lie in the future; needs lie in the present.
When a seller of a business and a prospective buyer meet, in 99% of cases they are also confronting differing—and usually unmet—needs, a fact of which very few are aware. This tension then becomes a breeding ground for conflict. The sooner this is recognized, the sooner there is a chance to halt the process or set the right course so that nothing stands in the way of the trip to the notary.
Freud’s iceberg model helps us better understand this unique dynamic. The visible part, representing about 10%, corresponds to our conscious perception: numbers, data, facts—the results of decisions. The invisible portion beneath the water’s surface represents what is unconscious to us—what we have repressed or conditioned into automatic response patterns. Needs, values, feelings—the causes of decisions.
The 4 Categories of Needs
► Pride —Image, Pride, and Recognition
► Profit —saving money, making money, increasing revenue, reducing costs
► Pleasure —fun, stimulation, joy
► Peace —Convenience, security, comfort, sleeping well
Aligning Goals—Do Sellers and Buyers Actually Want the Same Thing?
Just like an iceberg, hidden desires and needs lie beneath the surface on both sides.
Sales negotiations aren’t successful because everyone sticks to their positions, but because of a genuine interest in the other side. The 4 P’s allow you to learn more about the other party by asking the right questions. After all, it’s never about the company per se, but rather what needs it helps fulfill.
What does this mean specifically in the sales process?
Behind a high asking price (goal) may lie an unsecured retirement plan (need: Security = Peace) or an aversion to a prospective buyer (need: Pleasure = Joy). Another seller may be overwhelmed by the stress of day-to-day business life or be ill (need: Peace = tranquility). The purchase price plays a secondary role here. They want to sell quickly and be done with the responsibility. Those seeking peace of mind also do not want to remain emotionally attached to the company in the long term. Numerous warranty provisions in the purchase agreement, earn-out clauses, or a seller’s loan tend to run counter to their need for peace of mind.
The most common “P” on the seller’s side is likely “Pride.” This refers to the daily recognition, pride in one’s life’s work, and the feeling of being needed. If this type of seller cannot envision a positive future and is unable to let go, the sales negotiations can drag on for an extremely long time—or may never succeed at all.
The same applies on the buyer’s side. If the desire for security (need: Peace) dominates, the financing cannot be cobbled together hastily; the business model must offer strong prospects and, if possible, have a proven track record in recent years. If the classic “entrepreneurial gene” is dominant, this may conceal a desire to make money (need: Profit) and a desire for creative freedom (need: Pleasure).
Both buyers and sellers are equally advised to proactively become aware of their own needs. The 4 P’s provide guidance for getting to know the other side better. Only this shift in perspective ensures that the object of desire satisfies the right need. Put lip service to the test early on and agree in writing in a Letter of Intent (LOI) on what exactly is for sale and under what terms.
