Once you figure out WHAT type of business you want to buy and WHY, it’s time to get out there and start originating opportunities.
Today, I’ll cover the THREE primary ways to source potential deals:
But first, I want to introduce you to the concept of an origination funnel.
The opportunities you encounter go into the top of the funnel and then you QUALIFY them based on the following filters…
Now let’s look at the THREE approaches…
Who do you know in business? Customers, suppliers, partners… All will know of small businesses that need your help. Reach out to them.
You can also leverage professional advisers, like CPAs and lawyers, who have many small-business clients that may be looking to sell.
Wealth managers are another resource to tap. These are people who speak to their business-owner clients regularly and will know any sellers looking to make an exit.
Banks and other financiers have capital deployed in businesses and will know from their financial reporting the good businesses that may just be stuck.
These are all excellent sources of deals.
This approach works amazingly well and is also the perfect way to approach businesses you don’t know.
First, you need a list of businesses. Use online library resources or free trials of Hoovers, InfoUSA, Mint or Fame along with free tools like Manta and DueDil.
Search for businesses in your sector and desired location and download or print the details of the owner and how to contact them.
Then write to them in a rapport-building way. Feel free to use this script…
Dear [name],
I’m a seasoned business professional with X years of expertise in [your sector]. I’m also skilled in [list your primary horizontal skill sets – e.g., finance, sales, marketing, operations, etc.].
I have a significant network I can deploy into your business [detail potential customers you can introduce, etc.].
With my skills and experience, I have a lot to offer you and your business to help you grow, prosper and generate increased value.
I’m particularly interested in your business because [list a few items you know about the business that you like – awards, products, services, customers, processes, etc. – from your online research].
I also believe we have a connection via [people you both know, mutual sports teams and any other social information you can find on Facebook or LinkedIn about this person].
Let’s have an exploratory conversation and see if there is a fit here. I will follow up this letter with a call in the next few days. Alternatively, please call me at your convenience.
Sincerely,
[Your name and all your contact details]
LinkedIn and Facebook are both amazing platforms for originating opportunities. You can either post directly or join related groups (business groups by sector and/or location that fit your knowledge and skill base).
For a direct page post, say something like this…
Hi, I’m a highly experienced [X] based in [Y] looking to drive growth and value creation within small businesses between $1—10 millionin annual revenue.
If you know of any businesses that would significantly benefit from my advice, skills and experiences, feel free to connect me.
Best regards,
[Your name]
When joining groups, add value first. Post something like…
Hi, I’m a highly experienced [X] based in [Y] looking to drive growth and value creation within small businesses between $1—10 millionin annual revenue.
Does anyone need my help?
Best regards,
[Your name]
An initial 30-minute conversation may be all it takes for you to build massive rapport and value-add with the business owner, which could open up the opportunity to acquire the business in the future.
Another strategy is to contact business brokers and examine their lists of deals that haven’t sold within 12 months. Those businesses may need grooming, growing and optimizing for sale and your skills, experiences and network could play a massive part in this.
The more connections you make, the more opportunities you will have to feed into your funnel. A constant stream of deals means you only need to focus on the best opportunities – and you can play deals off each other.
Remember, dealmaking is a numbers game. Fill your funnel with opportunities and keep your deal origination machine humming.
Until next time, bye for now.
Carl Allen
Editor and co-founder, Dealmaker Wealth Society
P.S. In my Dealmaker Launchpad training program, there is an entire lesson dedicated to getting your deal origination machine up and running and finding opportunities. This seven-day course will have you evaluating deals within a week. Get details here.
