Deal Makers And Breakers

What Is The Best Type Of Deal?

Prospective Buyers In Deal-Making

The other is the small strategic buyers who may have a business 2–3–5 times bigger than the target. These strategic buyers acquire businesses they feel are beneficial to them. They jump on deals because it is a good fit, a complementary brand or a geographical location they are interested in. After that, they try to bring their people in to run the new site. Those tend to be the two kinds of buyers in the smaller spaces.

Lessons Learnt From Smaller Deals

  • Some deals may fail for reasons you have no control over. You just have to understand it is what it is. For example, you could work on a deal for months, then you get a call the night before the deal closes, and the caller says, “Hey man, I hate to tell you, but the deal is off. It turns out my wife wants a divorce, and now we have to split everything. I can’t sell the business.” What can you do in a situation like this? It’s nothing you did wrong; it’s nothing the seller did wrong. It’s just life.
  • Another thing in the small business acquisition is emotions getting involved — not wanting to let a particular thing go. It could be a sign that the buyer doesn’t want to buy and the seller won’t sell without. Things like this don’t happen in larger spaces. Matt gave a helpful tip for this scenario — you just have to stop and look around. Read the room, and consider the implications of the things you can’t agree on.
  1. The first thing you do in any deal is to evaluate. It would help if you looked through the financial statement over twelve months and went back a few years. Clean it up so that the buyer can easily estimate how much your business is worth.
  2. Turning in an unrealistic number could crash the deal.
  3. You need to provide quality bookkeeping with good customer service.
  4. The last thing you ever want in a deal is a surprise. Whether the buyer comes and says, “Hey, I found this. How do you explain it?” And you go, “I didn’t know about that.” You don’t want to be in that situation. An appropriate response would be, “Of course. We’ve seen that. Here is the explanation, this is why it’s like that… any other question?” That gives you more confidence and leverage to negotiate a good deal for your business. Buyers always want to pick out faults to get a discount.
  5. Run the business like you will sell it tomorrow, even if you don’t want to sell. Run it like you could sell TOMORROW.

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Corey Kupfer is an expert strategist, negotiator and dealmaker with 30+ years of experience. He is also the creator and host of the DealQuest Podcast.

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Corey Kupfer

Corey Kupfer

Corey Kupfer is an expert strategist, negotiator and dealmaker with 30+ years of experience. He is also the creator and host of the DealQuest Podcast.

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