Do you have what it takes to buy a business? While balance sheet capacity is important when evaluating an acquisition, experienced and successful buyers have more than deep pockets. The following idiosyncrasies will help develop your relationship with the seller and communicate your genuine interest in their business as well as their goals and objectives.
Be Enthusiastic! You were just presented with an ideal acquisition target – get excited! And convey that excitement to the business owner. Demonstrating a genuine interest in their business, rather than passively “kicking tires”, goes a long way toward establishing trust. Remember that energy is contagious. If you’re excited about their business and getting a deal done, the seller will get excited, too!
Listen First: As excited as you are to tell the seller why your company is a perfect fit, don’t undervalue the importance of listening. Make it a point to ask open-ended questions about his/her goals and objectives in a transaction. By listening first, you’ll understand the seller’s goals and can then outline a solution that meets their specific needs.
Move Fast: Once you’re confident that your target is the right fit, be prepared to move on it. Have your due diligence list ready to go, your advisors on standby, and please, don’t schedule a two week vacation in the middle of closing. One of our favorite adages at BAMA is “Time kills deals.” Keeping momentum will push the deal to the finish line.
Be Fair: Sellers want a buyer that treats them like an ally, not an opponent. Put yourself on the other side of the table and ask yourself how you’d want to be treated. While negotiation is crucial in every transaction, buyers who approach discussions with a fair intent are far more likely to reach agreeable terms and complete a successful transaction for both sides. At the end of the day, both parties should go home and feel like they had some wins.
Many sellers are looking at a combination of traits when they select a buyer for their business. In fact most buyers would rather take less money with a better buyer than get the best price but have a jerk on the other side of the table.