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#1 Question I get: Where to find a business to buy?
The gold standard of business sourcing is proprietary search.
It is available to everyone yet most stay in the swamps of bizbuysell.
Even those who try mostly do it poorly.
Read on for what has worked for us.
The gold standard of business sourcing is proprietary search.
It is available to everyone yet most stay in the swamps of bizbuysell.
Even those who try mostly do it poorly.
Read on for what has worked for us.
Rule #1: You can’t boil the ocean.
Start with either a niche you understand (let’s say you are an avid snowboarder) or a sector with high gross profit margins and predictable revenue (self-storage anyone?).
Start with either a niche you understand (let’s say you are an avid snowboarder) or a sector with high gross profit margins and predictable revenue (self-storage anyone?).
Rule #2: Go Deep.
Get to know business owners in that space. Let them know you are in the market to buy. If you see any businesses listed for sale in that space, call their brokers and introduce yourself. Comb Yelp and Angie’s List if a service biz.
Get to know business owners in that space. Let them know you are in the market to buy. If you see any businesses listed for sale in that space, call their brokers and introduce yourself. Comb Yelp and Angie’s List if a service biz.
Rule #3: Be Patient
One business owner proposed we buy his business after we became friends and he helped us with other acquisitions for three months. Show up and back up the talk with being genuinely helpful and respectful of their knowledge.
One business owner proposed we buy his business after we became friends and he helped us with other acquisitions for three months. Show up and back up the talk with being genuinely helpful and respectful of their knowledge.
Rule #4: This is Sales.
If you can’t sell yourself as a business buyer to a cold prospect, how are you going to sell your companies products and services after you own the business? Solve for their needs as a seller and work backwards.
If you can’t sell yourself as a business buyer to a cold prospect, how are you going to sell your companies products and services after you own the business? Solve for their needs as a seller and work backwards.
Rule #5: Evoke Curiousity
Bad outbound: I am a Stanford MBA and the founder of Granite Point Capital. I am looking to make an acquisition between $5 million and...
Great Outbound: I love your service. Would you ever consider selling your business for the right price?
Bad outbound: I am a Stanford MBA and the founder of Granite Point Capital. I am looking to make an acquisition between $5 million and...
Great Outbound: I love your service. Would you ever consider selling your business for the right price?
Rule #6: Leverage Outsourcing, But There’s no Substitute for You
Having a VA make lists of business owner contacts is great. Having them cold call... not so much. Small biz is about persona relationships and handshakes. The seller needs to like the buyer. Make your case.
Having a VA make lists of business owner contacts is great. Having them cold call... not so much. Small biz is about persona relationships and handshakes. The seller needs to like the buyer. Make your case.
Rule #7: Be Fair
You will know more than the seller about the market. Start by asking what seems fair to them. Make an offer that wouldn’t be laughed at if they call a broker to represent them. Don’t grind them on terms.
You will know more than the seller about the market. Start by asking what seems fair to them. Make an offer that wouldn’t be laughed at if they call a broker to represent them. Don’t grind them on terms.
Rule #8: Options Appear as Relationships Build.
We had two difficult-to-finance acquisitions close with mostly seller financing. This would have been impossible on the first conversation, but was reasonable after trust was built and we were in diligence.
We had two difficult-to-finance acquisitions close with mostly seller financing. This would have been impossible on the first conversation, but was reasonable after trust was built and we were in diligence.
