Regional Search and Deal Sourcing

June 24, 2019

by a searcher from James Madison University - College of Business in Denver, CO, USA

I am starting a regional search focused in Colorado and am looking for creative ways to leverage being local to source opportunities. Understanding there are plenty of disadvantages to a regional search (vs. traditional), one of the advantages is meeting people in person is easier. Therefore as a part of the search I plan on attending as many local conferences, trade shows, business lunches, etc. in the area as I can as well as network with brokers, private wealth managers, consultants, lawyers, etc. Any other ways to leverage being local? Any other avenues to get in front of business owners?

Separately, any thoughts on using an industry approach with an already narrow geographic focus? Obvious concern is that is too focused and the universe of businesses will be too small, However could that be mitigated by just cycling through industries quickly? Or maybe an opportunistic approach is just more reasonable than industry given the geographic focus.

Thanks!

Reply by a professional
from Harvard University in Boston, MA, USA

Hi Daniel, have conducted two regional searches and found direct outreach to owners to be quite fruitful. Business owners get many unsolicited inquiries so it's a numbers game. But by taking a thoughtful approach (snail mail followed by phone) and highlighting that you're around the corner helps engage owners. I've found that overlaying some level of an industry "story" is also an important ingredient. You'll be viewed as much more credible if your search focus aligns with your experience. And never place a call without being armed with a reasonable answer to the question, "Do you even know what business I'm in?" That question will be asked and by nailing it, you'll have your foot in the door. Lastly, building on Danny's point, you'll need to entertain multiple industries in order to be successful with a geographic search.

Reply by a professional
from Loyola Marymount University in Los Angeles, CA, USA

Hi Daniel, as long as you're industry agnostic I think you'll be fine. I think you should come up with a few industries to initially target and research companies in those given industries that fit the geographic requirements. This will be a good starting place. Once you're in the weeds you'll have a better understanding of the ideal companies and ideal service providers for said companies. It will secondarily act as an idea generator for other areas of interest once you better understand the industry dynamics. If you ever need help on the idea side, we have a list of companies and deals across different industries that may be of value to you via substack.privsource.com

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