From The Wall Street Journal Online
Question: I have been searching for a business to buy for the past couple of years. I have clear criteria defining my desired business segment, and I have built a network through investment bankers, primary lending institutions, mezzanine lenders and brokers. But I'm disappointed with the results. What is the best way to promote myself to companies that want to sell?
-- D.K., Greensboro, N.C.
Answer: You're taking many of the right steps, but perhaps you're not mingling with the most clued-in sources: potential sellers themselves.
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 Akron 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.
Another option is asking venture capitalists in the industry, who may be looking to divest businesses from their portfolios.
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