Buying a business can make you money.
Not only that, it can expand your asset portfolio and help your own business to grow if you take on competitors.
New to buying a company?
Maybe you’ve been mulling over the idea of buying for a few months and feel a bit overwhelmed by the whole thing.
Maybe you’re in the middle of an acquisition that seems to be taking forever to get off the ground. Or you’re waiting for a call back from a broker who said he’s got something he thinks you’ll like.
Maybe you’ve found a business you’d love to buy, but what next? Approaching a business can seem confusing and a lot like hard work. And if they’re not even advertising it for sale, it can feel intimidating to make a direct, cold approach.
But don’t let that put you off. You’d be surprised how many business owners are open to a sale.
So what’s the best way of getting in touch?
The Benefits of A Direct Approach
As discussed in a recent blog, there are various methods of finding a business to buy.
Using a business broker is one route. They may cut out a little leg work, and might even have a business on their books that looks like a winner. But using a middleman has its downfalls…
Like jumping through other people’s hoops.
Being restricted by irritating gatekeeping from brokers before they even afford you a conversation is hugely frustrating. You’ll also need to do your own financial investigations before you can make any sort of business decision.
A direct approach waives those negatives.
Doing it yourself makes for a simpler, speedier process. Not having to wait on middlemen means far fewer delays. Further time is saved in having found exactly what you want in the first place and being able to get to the point very quickly.
Types Of Direct Approach When Buying a Business
So you’ve done the groundwork. You’ve searched a multi-listing site or found a business you’re interested in buying through a contact. You have done due diligence and dug up what you could of their financials. It all looks good.
Time to make contact. There are three main ways you can go about the direct approach, and each will lend itself to different businesses and situations.
Direct Approach #1 – The Personal Letter
Before the rise of social media, the letter was integral to business. But it can still work in the modern day too.
Your letter will need to be deeply personalised and very well written, setting out exactly what you are offering and why. Get someone to go over it with fresh eyes before you send it to make sure there are no glaring mistakes.
Handwriting a letter can feel more personal in these days of automation and technology but it takes up far more time. The business owner of your potential acquisition may well prefer faster, easier methods of communication.
Direct Approach #2 – LinkedIn
If you’ve read my previous blog on buying businesses, you’ll know that using LinkedIn is my favourite approach.
However, whilst many other business owners also prize social media, certain sectors or older owners may be far less prevalent on the scene and hard or impossible to find, let alone contact.
Plenty of businesses also hold token social media accounts that aren’t actually active, though you can usually spot these a mile off judging by their recent activity.
There is also the risk that your connection request or InMail goes ignored.
That said, direct approaches through LinkedIn have worked incredibly well for me in the past. It’s actually my most productive method. But it’s got to be done in the right way or you can rub people up the wrong way.
Direct Approach #3 – Email
Email is the number one communication tool used both internally and externally in modern-day businesses.
It makes sense that sending a well-written email could weave the perfect ratio of technology and personalisation into your first contact.
In some instances the recipient may think your email is spam – especially if they have had no intentions of selling up. Your subject line therefore needs to be clear as well as compelling, so that your email actually gets opened in a very busy inbox.
Which Direct Approach Is Right For You?
Working out which approach suits your situation needs a bit of thought.
Where did you find the business or businesses you intend on targeting? If they were already listed online, it’s more likely they will have a social media presence. Do a background check and see what you can find out.
What industry are you thinking of buying in? What do you know about the age and lifestyle of the Business Owner? Will a personalised, hand-written letter be appreciated? A small scale shipping company is less likely to be part of the social scene, whereas a young marketing business owner is far more disposed to prefer email and social media.
Take some time to find out as much as you can about the business you want to contact.
What If They Don’t Want To Sell?
Not every Business Owner wants to sell up. Even if they do, the timing may simply be off for them.
It will feel disappointing, but approaching a business only to be turned down is far from a waste of time.
You’ve started to build that relationship and given your network a boost. They could end up deciding to sell later, or might know of another business that’s ready to sell now.
Nothing ventured, nothing gained.
Need A Little Help?
It can be downright scary reaching out to a business you want to buy, no matter how prepared you are. That’s where I can help.
I’ve been buying and selling businesses for decades, through every means imaginable. Book a call to see how I can support you in your buying journey.