The Wall Street Journal Online:
Many business-acquisition opportunities aren’t widely known about, even by investment bankers, because sellers fear roiling employees and customers by taping a for-sale sign in the window. Instead, they wait patiently for the right buyer to knock.
There are many businesses today “owned by 70-plus-year-olds that don’t know what they’re going to do with it,” says Ray Lampner, head of mergers and acquisitions for an Akron, Ohio, accounting firm.
Ken Thompson, an entrepreneur who has bought nearly 20 businesses, uses a strategy he dubs “call-mail-call.” Start by calling a few business owners in the industry and ask if they know someone who may be interested in selling. Don’t request an immediate answer, but say you’ll follow up. Two weeks later, send a letter with your business card reminding them about your desire to find prospective sellers and that you’ll call again soon. Finally, call back to inquire if they’ve come up with any possibilities.
This strategy works, Mr. Thompson says, because it shows you’re a serious buyer and allays the owner’s fear that “you’re the secretary’s boyfriend calling to figure out whether she’s going to be laid off.” Moreover, even if business owners you contact aren’t looking to sell, they likely know another who is.
Other resources are trade-group newsletters with classified ads, and accountants, who often know interested sellers before they’re officially hunting for buyers.
Photo by kirstenjoyhill.
Randy on January 9th, 2007 at 5:57 pm
Light manufacturing or warehouse building in unique, charming island community of Sabula, Iowa. Should convert nicely to call or data center with fiber optics to lot line.
Greg Balanko-Dickson on January 9th, 2007 at 6:30 pm
I agree there are many opportunities for buying a business if you are willing to do a little work, like the call-mail-call strategy mentioned.
In my book, Tips and Traps When Buying a Business I devote an entire chapter on locating a business to buy plus a chapter on how to approach the seller.
Noel McKinney on January 10th, 2007 at 6:49 pm
Also consider working through a business broker that you feel comfortable working with. Sometimes business brokers are working with sellers in deals that aren’t advertised, or they might be willing to find the right business for you.