Shut Out by Industry Brokers, an Entrepreneur Finds a Way
March 25, 2022
by a searcher from Brown University in San Francisco, CA, USA
Proprietary search: yes or no?
If you want to buy a business in a certain industry, and the industry brokers won't talk to you... it's not really a choice.
This is what happened to redacted.
Patrick wanted to buy a bookkeeping/accounting business.
But he's not an accountant himself.
Industry brokers were like:
"Get back to me when you partner with a CPA."
Even though gatekeepers were blocking him, the more Patrick looked at the space, the more conviction he felt.
Not taking no for an answer, the proprietary search begins:
* Upwork contractor to build the list
* Accounting/bookkeeping businesses of a certain size
* Geo-specific search (New England)
How'd it go?
500 emails to...
20 owner calls to...
3 LOIs to...
1 closed
Turns out owners of these businesses were more open-minded than the brokers!
Also, Patrick's messaging was good:
"Will,
I'm looking for an accounting firm to acquire in California, and Acquiring Minds seems like a potential fit.
I've been working with small businesses for 10+ years.
If you've ever thought about selling, I'd love to chat. Just reply and we'll get a conversation started."
Personalized & direct.
And the drip was just 3 messages over 2 weeks.
So what was the business he found & acquired through proprietary search?
Appletree Business Services
Appletree is awesome because:
1) it's north of the $1m revenue ceiling that many bookkeeping/accounting businesses never crack, and
2) the firm has a monthly recurring payment model.
In sum...
There are strong arguments for/against proprietary search.
But Patrick believes that when your search is both industry- and geo-specific, it can be a great use of time.
In fact, he'll teach you exactly how to do it.
It'll just take 10 hours of your time & 500 bucks. (For the contractor & software; Patrick's not charging, just helping.)
He only asks that you promise you'll actually use it! Hit him up: redacted
To hear the full story of Patrick's acquisition, check out this week's episode of Acquiring Minds in your podcast player.
redacted
in United States
I have worked with a couple of buyers who had a similar system in place targeting potential business sellers in other industries.
One buyer of most recent, after###-###-#### months of his search, landed on an accepted offer of the right business he wanted to acquire within his parameters. A lot of direct, cold outreach to business owners. I ended up financing his change of ownership loan. I told him he needs to write a book about his personal search system and journey through the###-###-#### months. Fascinating. Very similar to @Patrick Dichter system.
The same buyer actually met with SBA lenders, similar to how he approached potential small business sellers. He direct cold-called me as a lender and vetted who he wanted to work with. He was looking for a lender that communicated promptly, was experienced in the change of owner financing space with full transparency, and collaborated with him by offering solutions.
Yes, it was a long journey of looking at several potential businesses with him. Well worth it to all the day of loan closing!
from New York University in New York, NY, USA