Hey Biz-Buyers,

Welcome to this week’s Boring Business Brief, where we share some of the best insights, tips, and stories from our private biz-buying community.

Today’s lessons? We’ve got 2:

1. Nailing your first call with a seller. How you can do it, frameworks to utilize, and a link to an amazing story about connecting with a seller on another level.

2. How to weigh the risk of an owner leaving a business if you’re considering buying it. Nearly every new biz-buyer is going to find this one relevant.

Alright, class is in session. Let’s get down to business…

Today, in 5 minutes or less:

✔️ Buyer tips: How to NAIL a first call with a seller

✔️ Risky business? What to ask if an owner is leaving…

✔️ 3 GREAT links from the week

✔️ Who’s looking to buy a biz?

Buyer tips: How to NAIL a first call with a seller

Recently, Tyler approached the community with a question we LOVE to see.

He had recently identified a company that appeared to fit his deal box well.

Really well.

The owners are planning on retiring, the employees are expected to remain on board, and the company is located nearby.

“The numbers check all the boxes for me,” Tyler explained. Knowing all that, you can understand the excitement with which he asked the following question:

“Any tips that could help me knock this call out of the park for the owner?”

“He’s got to choose me too!” Tyler added.

He’s absolutely right, and here’s some advice other members had to offer:

Sage

“Be yourself, showcase why you’re the right guy to run this business (knowing and loving the industry is a big help).

Continue to focus on getting to know the owner, understand their needs, and build the relationship — ask them some deep questions and let them talk. If they like and trust you they’ll give you more than you need to know to understand the risks and negotiate a fair deal.”

Dustin

“Build rapport. I believe the FROG method is a good framework for these meet-and-greets with sellers.

• Family — Ask if they have kids. If yes, ‘they aren’t interested in the family legacy?’
  
  
• Recreation — See if there are some commonalities you can connect on and help them remember you by.
  
  
• Occupation — ‘What made you get into this industry?’ Can potentially also ask why they are ready to leave and what the story behind it is.
  
  
• Goals - ‘What are your plans after you’ve sold the business?’ This will help you gather intel on your deal structuring.

Become an active listener, let them do all the talking, and this should lay the foundation for other conversations if you like what you hear!”

Rafael (Facilitator)

“Remember, you’re selling yourself in the beginning. On today’s mindset call, we talked about presenting yourself as the person they want to sell the business to. There will be a time to get into all the numbers and due diligence later. For now, connect with another human.

Make this the time that they go home and I think, ‘I found exactly who we want to sell this business to.’ Make a time to go to lunch for a follow-up. You’ll learn a lot more about their demeanor and personality, and how that is a basis for the culture of the business you are looking at.”

Bottom line: Try using these tips on your first call with a seller, and for an amazing story about connecting with a seller on another level, read this.

Risky business? What to ask if an owner is leaving…

“I’m seeing a pretty common theme around risk. Specifically, the risk surrounding what happens to the business when the existing owner exits.”

That’s from Contrarian Community leader and facilitator Lloyd Silver, who also just so happens to be a business broker and owner himself.

Per Lloyd, here are the 2 questions you should be asking...

1. How much revenue is the existing owner personally responsible for bringing into the business?

“The more the business relies on the relationship between the current owner and customers to drive revenue, the more risk there is to the acquisition,” Lloyd explained. “Word of mouth focused on the owner isn’t great. Repeatable sales and marketing that brings in customers are ideal.”

2. What would the impact on the business be if the current owner took 2 months off right now (before the exit even happens)?

“If the business would fall apart if the owner took off an extended period of time, or even just a couple of weeks without constantly checking in, the more risk there is in the acquisition,” Lloyd said.

“If the owner has systems & processes that keep the business running, with employees capable of keeping things running smoothly, the better things will be for the new buyer.”

Now, these are just a couple of risk factors, and he’s not saying you can’t “successfully acquire a business that isn’t perfect in these areas.” But, according to Lloyd:

“Understanding these two elements will help you understand part of the risk and look at ways of mitigating issues with 1 or more of:

1. Lower purchase price
2. Earnouts and forgivable seller notes
3. Extended transition periods with the owner”

Oh, and one more thing, says Lloyd…

“Be smart!”

3 GREAT links from the week:

💰 Read: CT Facilitator Clint Fiore’s AMAZING thread about what it means to “buy a biz with $0 of your own money” and how to do it...

📊 Bookmark: Some interesting insights into tracking your biz-buying cold outreach

🎧 Listen: A good biz-buying podcast episode about a metal business and “acquisition through apprenticeship”

Who’s looking to buy a biz?

A partial list of real people who began their Contrarian Community journey in recent weeks…

• 👷👩‍💼 A couple with backgrounds in engineering and dentist management
• 🧑‍💼 An executive at a bank
• 👩‍⚕️👨‍⚕️ A clinical psychologist and an emergency medicine doctor
• 👷 An engineer at a fluid power company
• 👨‍💼 A 60+ year-old pilot and owner of a financial services company, who said this as part of their ‘why’:

“I have a good legal and financial services background. Neither one of those fields is currently my passion. I’m most passionate about business building. I’ve started several businesses in the past with really only one business making significant money. I like this core ideal of buying, improving, and adding on. I could retire, but I have no interest in that. Every morning when I wake up, no matter what part of the world I’m in, I get excited about this new phase in my life of growing an empire with my business partner.”

And by the way…. That partner?

His daughter.

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