Once you’ve chosen a business you’re interested in buying, your next task is developing an offer and making your interest known to the current owner.
In some cases, this phase of the business-buying process can be likened to attending a job interview. If there are multiple buyers, all vying for the opportunity to put in their offer, it can be daunting. You’ll want to put your best foot forward, of course, and make sure you’re not overlooked. But, at the same time, you need to keep your head in the game and make sure you don’t get so caught up in the competitive aspect of the situation that you end up making an unwise decision you’ll regret down the road.
As you start the inquiry process, there are a few things you’ll want to keep in mind:
If you’ve selected this business based, at least in part, on your personal experience, knowledge base, and skill level, you should be able to rely on these to bolster your confidence heading into the inquiry stage.
Again, like a job interview, how you carry yourself says a lot about the kind of owner you’re likely to be. Most business owners care about what’s going to happen with their company after they leave, even if they need to sell quickly. If you can impress the seller with what you can do and how your skills will support his or her business going forward, you should be able to convince them you’re the best buyer for their business.
If a company is worth buying, most sellers will end up hearing from many potential buyers while it’s on the market. Some show initial interest but disappear later. Others may seemingly appear out of nowhere with an aggressive bid and a desire to move quickly. No matter when or how you get on the seller’s radar, the key to staying there is to be persistent:
Show them that you’ve done your research and don’t be afraid to ask questions. Prove that you’re a determined to succeed and committed to offering the best deal possible for both parties. Sometimes, the difference between winning and losing a bid for a business is simply staying at the top of the seller’s mind.
Don’t focus solely on the money
While the value of the business you’ve chosen, and the eventual offer you make, are both important to both you and the seller, many buyers make the mistake of considering it the only item of importance in the transaction. As noted above, most sellers are heavily emotionally invested in their businesses. They’re not just robots waiting for the right financial lever to be pulled.
Showing that your interest in the company goes beyond strictly financial matters can quickly set you apart from those prospective buyers whose outlook is limited in that respect.
Study the listing and reply accordingly
From a purely practical standpoint, it’s both irritating and frustrating to a seller when prospective buyers waste their time by responding to advertisements or businesses for sale listings without reading it thoroughly. They ask questions the ad already answers, provide information the seller doesn’t want or need, and generally end up sounding disengaged or worse.
If you want to stand out positively, it is crucial that you thoroughly review the ad or listing, responding to each feature appropriately with your own information or an intelligent question or two. Go into as much detail as you can in areas where the current owner is seeking feedback to show you care about their vision for the new owner of their business. Sellers can only appreciate a buyer who makes the effort to address their points and strives to meet their expectations.
Step into the seller’s shoes
In summary, the real key to standing out as a prospective buyer is to recognize the fact that the seller has undoubtedly put a lot of work into the business over the years. They want to know that the company they may consider as their personal legacy will be in the best possible hands going forward. Pretend you are the seller and think about what you would want from a potential buyer, then try to be that buyer.