What are the main barriers faced by owners to sell to searchers?

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January 10, 2024

by a searcher from Cornell University in New York, NY, USA

One of the main points that come out when talking with fellow searchers is trust, but there might be others.


A few could be:
- Emotional aspect of selling what they built.
- After receiving the money where to invest it and have good returns ( something I see mostly in developing countries where markets are very volatile).
- Uncertainty to pass it to family members.

Sometimes this barrier is so big that through time, the target company is eliminated by competition.


Tell us your experience! What have you faced and what are your proposed solutions?



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commentor profile
Reply by a searcher
from Texas A&M University in Surprise, AZ, USA
Sometimes owners may be spoiled for choice. They may be receiving periodic purchase offers and as a result feel unmotivated to sell. The preparation for a sale can also be an internal hurdle.
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Reply by an intermediary
from Boise State University in 800 W Main St, Boise, ID 83702, USA
What is critical to understand is that if a seller has owned a company for a significant period of time, say 15 to 30 years, there is ALWAYS going to be an emotional attachment. John Warrilow discovered this when he ran an analytics firm. He calls these types of owners "Mountain Climbers". (He's written several books one of which is "Built to Sell"). What these business owners do is who they are and to make the decision to sell requires that they have another goal to move onto. When they stop being the owner of their company, who are they? This is their thinking. Or in a worst case scenario, health is forcing them to sell and even then the emotions are still strong.

One thing I have noticed about Searchfunders is that they tend to be highly educated and analytical but have low emotional intelligence when it comes to dealing with humans who happen to be sellers. My advice is forget the spreadsheets when you're talking with an owner. Ask questions, learn about them, understand what they've built, what their dreams were and are, and then once they "know, like, and trust" you, perhaps you can make a deal. Too many times Searchfunders overwhelm sellers with their intellectual prowess and ignore the emotional side. Every small business is owned by a human who has feelings even if they don't admit that. Buying a business is like developing any relationship. You must be interested in them and they in you.
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