Finally Closed First Deal After Almost 3 Years

After 3 years of trying...

After countless failures...

After reaching out to/sending to/talking with more than 50,000 people (lenders, bankers, investors, lawyers, business owners, etc.) to get a deal done...

After countless hours on Zoom meetings, phone calls, sending emails, and doing countless pitches and having relationship-building conversations...

After wanting to quit due to frustration more times than I can remember...

After many close calls on previous deals - including one that I literally signed the paperwork on to buy it, then my financing "partner" failed to fund the deal at closing so we lost that deal...

After somehow keeping my investors on board after all these years and all these other failed attempts...

After this deal almost failed dozens of times...

After all this and much more that I have forgotten over the last 3 or so years, as of Thursday, March 28th, my investors and I closed on our first deal and are now owners of a wonderful landscaping business.

The landscaping company and land we own are worth $6.5 million combined.

We got the deal done with $500,000 down. The seller financed the rest of the deal.

Due to competitive and legal reasons, I won't say the deal's location or the company's name. But I'm writing this to give tips to everyone looking for—and struggling—to close a deal like I did for so long.

In no particular order, below are my recommendations to anyone looking to acquire a business based on the lessons I've learned over the last three years. And now finally closing a deal.

- You MUST Have Or Develop An ENORMOUS Amount of Patience And Persistence

When I say I reached out to, talked with, and met with more than 50,000 people... I really did that. Myself. I had no team doing this entire deal. I'll elaborate on this below.

Building lists of people to send to for proprietary outreach... Following up with them... Meeting with them... Vetting the financials... Valuing the business... More follow-up, etc.

Same thing for looking through sites like BizBuySell and others.

When I first learned about acquisitions, many people said it took 100 outreaches to close a deal. Maybe if you have more connections and more money than I did. But for me, it took more than 50,000 outreaches to lawyers, business owners/sellers, financiers, lenders, investors, etc, to get a deal done. And this doesn't even count the constant communication with the various owners, sellers, and lawyers AFTER getting an LoI signed and doing due diligence.

If you don't have extreme patience and persistence... You must develop it. Or at least be better than I was in trying to get a deal done so it doesn't take you 50,000+ outreaches ;).

- You MUST Have Or Develop Thick Skin

I don't know how often I got ghosted trying to get a deal done... How many times I got called a liar - for no known reasons other than they didn't believe I could get the deal done and had the investor capital I had... How many times people told me I couldn't get a deal done... How many bankers told me they couldn't lend on deals I showed them that were great.

I don't know how many times I got hung up on, or ignored, or told to F off. I don't know how many people lied to me - as one example my "partner" I alluded to above... We had essentially closed the deal on an $8.85 million acquisition... I'd even signed the paperwork because he promised to fund that morning. But he didn't ever fund the deal so we didn't get it. He promised he had the money, he "showed" us he had the money in accounts, we did an extreme amount of due diligence on him and his firm, and still it ended up failing and being a nightmare.

I don't know how many people told me they could do the deals I was looking at... Only to find one small thing they didn't like and then back out of the deal. I don't know how many times deal terms changed, and I had to renegotiate things on the fly to keep deals alive. Including the deal I closed.

I don't know how many times people promised me things... Then failed to deliver on those promises.

Between the no's and the people ignoring me, I have no idea how many no's I got during this entire process, but it's north of 45,000.

If you don't have thick skin... You need to develop it.

- You MUST Build Great Relationships AND Trust With Everyone You're Dealing With

Trust and relationships are paramount in these kinds of dealings... The entire reason I was able to keep my investors - even after I offered to give ALL their money back at several points - was because they believed in me. Even at the times when I was low on belief.

I was able to close the deal I've now closed on because I built such a great relationship with the sellers... I tried for months and hundreds if not thousands of outreaches to bankers, lenders, and investors to get the financing to close on the deal. With the inflation, higher interest rates, and risk averse bankers and investors they all said no in the end. So I gave up on getting the deal financed through a bank and told the sellers the only way I could do a deal was if they financed the majority of the deal.

They said no... However, a month or two after this, they came back and said they would. "Because they believed I was the best buyer for the deal. Because they loved my long-term vision and how I planned to work with their team and business that they'd built for 40 years."

Without belief, trust, and building great relationships, this would have never closed. And my investors would have requested all their money back A LONG time ago.

The above are all requirements to getting a deal done that most "gurus" in this space don't talk about which is why I've elaborated on them more here.

The next tips are also important - many of them necessary as well - but others talk about them more so I will only provide small details about them.

- You MUST Have A Margin Of Safety When Buying

Economic environments will change as you're working to get a deal done... Things at the business will change... You will change... Because of this, you need to buy with a margin of safety principle as Warren Buffett, Charlie Munger, and many others talk about.

Example - if your valuations show you the business is worth $5 million. You should buy at $4.5 million or less - as a general rule of thumb as every situation is different. Or whatever margin of safety you are comfortable with. Maybe that means longer terms and lower monthly payments for you at a higher valuation... Maybe you can get the seller to take on more seller financing on the deal to lower your risk... Maybe you can buy the land the business is on as well... The list goes on... But you need some kind of margin of safety to lower your risk when buying.

- You SHOULD Work With Others and Build A Team

You should build a team ASAP to help you buy a business... As someone who has done this himself over almost 3 years... Don't unless you absolutely have to.

At one point I was essentially working 7 different jobs - finding the deals, negotiating them, doing the due diligence, raising debt, raising equity, finding and negotiating with the lawyers, and sellers, and so on.

Plus, I'm a dad and a soccer coach on top of that... While also finding work when needed to pay bills while I worked to close the deal.

Find a team if you can - or you will get burnt out eventually.

- You MUST Master Numbers and Valuations OR Have Someone On Your Team Who You Trust Who Can Do and Update Numbers

This shouldn't need to be said but it does need to be said. You MUST master your numbers and valuations and financial models to adjust for things as they come up. And you need to trust that the adjustments are true and accurate. If you can't do this, you won't know the company's true profitability... This means your valuation won't be accurate... Which means you won't have a margin of safety.

- You NEED To Have Your Plans - But Also Have Multiple Back Up Plans and Ideas

Like Mike Tyson says... Everyone has a plan until they get punched in the face... You need to have your plans... But you also need to have B, C, D - Z plans for WHEN things come up or happen. Because they will.

- You MUST Remain Calm When Things Get Testy

This is another necessary thing that no one talks about... If you can't remain calm in the heat of the moment when things get tense and stressful... It will remain difficult if not impossible to close a deal. This cost me a couple deals early in my journey because I would occasionally take things personally when someone called me a liar. I hate being called a liar and am not one. In reality it just meant they were scared or nervous about something and I should have talked through things with them.

Because I learned this lesson, when things got tense and heated as we neared closing on this landscaping deal - and they did right up until closing - I always remained calm... And this time I closed the deal.

- Find People That You Can Talk To About What You're Doing Daily

Seriously... Looking for businesses to acquire for most of us is lonely and isolating because we are Searchfunders, looking to do deals ourselves, or are working with at best small teams to find deals. We aren't huge funds.

Find people you can talk to about this a) so you can bounce ideas off of each other and learn from each other faster. b) so you don't go crazy.

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If anyone has any questions, please feel free to reach out here or at my email --@----.com hope this helps.