SEARCHERS: WHEN SHOULD YOU TRAVEL TO MEET A PROSPECTIVE BUSINESS OWNER?
We asked our Searchfunder.com community, when should a searcher travel to meet a business owner face-to-face? Respondents were given 4 options during the life of their search: (i) during the prospecting phase; (ii) after the Indication of Interest, called an IOI; (iii) after the Letter of Intent, called an LOI; or (iv) once due diligence has started.
A plurality of respondents believe that a searcher should travel to meet a prospective business owner face-to-face during the prospecting phase -- essentially as early as possible. This choice narrowly beat out waiting to do so only after an IOI has been initiated -- 41% versus 39%. Searchers and investors tended to narrowly favor the prospecting phase, while intermediaries, such as business brokers, tended to slightly favor waiting until after the IOI. This difference in perspective is understandable as intermediaries want to present prospects to their clients that seem serious.
During our interview, ^[redacted], President of UCIT Online Security talked about the time and effort that goes into building rapport with the business owner and walking away from deals during his search and even in looking at subsequent post-acquisition targets that didn't feel right. Putting In The Time & Effort Before th[redacted]eal. CEO of Efficient Forms ^[redacted] discussed the initial meeting between his seller and him and discovering commonalities that went beyond screening metrics. In Closing the Deal, Sometimes It's Better to Be Lucky. Those touch points played a role in having the seller engage with his search fund and considering it as a credible potential buyer. President of Pro Max Fence Systems ^[redacted] relayed how an initial 1 hour face-to-face meeting turned into a 4 hour conversation with his seller. Having Fun Learning My New Business.