How to Stand Out as a Buyer

Photo by Robert Clark on Unsplash

While there are cases of a single buyer connecting with an owner, submitting an offer, and having everything go smoothly and close within 90 days, that’s the exception, not the rule. The best businesses have multiple suitors and to win in those situations you need to think about how the best candidates stand out when applying for a job: differentiating themselves.

The Structure of Your Offer

One of the first ways you’ll be able to telegraph who you are as a buyer is through your offer. Components include:

• Means. Is this being financed from ready cash or do you plan to finance using the SBA?
• Price. Are you offering full price? If you aren’t, do you have reasonable objections backed up with data?
• Down Payment. How much are you willing to put down against the purchase price?
• Earnout. Are you tying any percentage of the offer to an earnout? If so, for what period of time?
• Seller financing. Do you expect any amount of the offer to be seller financed? If so, for what percentage?

As you might guess, an ideal scenario is all cash, full-price, 20% down, no earnout, no seller financing. But that rarely happens. What you have to do as a buyer is put forward your best effort possible when making your offer. If you hold anything back, it may be just that little bit that leads to you losing out against a close competitor.

Meeting in Person

The money is the most important part of the deal, but the second most important is the connection between the buyer and the seller. Many sellers have an emotional tie to their businesses, having built them over many years. They want to make sure that the business and their team members are being handed over to a safe pair of hands. Things to consider for an in-person meeting (or, if the situation calls for it, a video call):

• Be yourself, but be friendly. If you tend to be more reserved and quiet, try to be a bit more open and talkative during this meeting.
• Share your professional past, with humility. Yes, you want to show that the seller’s business will be safe with you, but you need to do so with a spirit that you are also going to be learning to be a business owner. The worst thing you can do here is come in with a spirit of knowing everything.
• Share your ideas, ask for input. Before this meeting you will have had a chance to look at financials and other aspects of the business. Whatever your questions for growth or expansion, lead with curiosity and ask for feedback all the way. Examples include:
  • “I was thinking about expanding into online sales, have you tried that before?”
  • “I see we haven’t done digital marketing before, what do you think of that?”
  • “What’s the biggest opportunity you would have gone after if you had to start over today?”

As we said already, the best businesses have the best offers, and sometimes even your best effort might fall short. What you have to keep in mind is that buying a business is a marathon, not a sprint, and at some point the right intersection will happen for what you bring to the table and what’s on offer.

If you’d like to see what’s on offer these days, give us a call.