The first owner call can be a frightening experience to the newly-minted searcher, particularly those without a sales or sourcing background. With a heavy dose of imposter syndrome, we begin the search by defining and creating our sourcing process, eventually yielding a target list of opportunities we aim to contact.
Then, we go through the work to reach out to business owners directly via sales outreach tools, email, and maybe even phone calls. With enough velocity and the right approach to your outbound communications, you’ll land yourself with some introductory owner calls.
So, what do you do once you’ve found an owner willing to speak with you about selling their business?
Today, I’ll walk through the significance of the first owner call in the journey of a search fund entrepreneur, particularly for those just starting out. These initial interactions bring a mix of anticipation and uncertainty that seem foreign to the searcher getting started but are part of the routine for the seasoned one. I hope to share my insights with you on the following:
Deciding to engage or not in an introductory conversation
Preparing for the calls
Overcoming fear and anxiety
Directing the conversation effectively
Expectations vs. reality
Other best practices
Deciding to engage
Time is the most important resource during your search. How you spend every waking moment dictates whether or not you will set yourself up for success in terms of completing an acquisition. When inbound emails come in from your outreach efforts, it’s important to decide quickly whether you should spend more time on a lead or pass.
Too restrictive of a view may leave you empty-handed when all is said and done, while too loose of one may cause you to waste valuable time evaluating bad businesses or with business owners who have no intent of selling to you.
I recommend focusing your time on those interested in and actively considering selling their business. Those who are simply exploring the idea of selling may be good contacts to build relationships with over time throughout your search, but they are not your priority. Equally, I’d advise you against spending considerable time with business owners who have no interest in selling unless you’re looking for industry knowledge. Even then, I’d be cautious, as one person’s viewpoint is not necessarily the right one regarding a specific industry.
What you are solving for here is to get yourself out of what I’ll call ‘Maybe Land’ as soon as possible. A firm ‘No’ is always better than a ‘Maybe,’ so be careful of getting caught in the trap of thinking you can influence an owner to sell their business when they haven’t seriously considered doing so. This doesn’t mean you should not engage with them over the long run, but these should not be conversations where you’re mostly spending your time.
Each searcher has minimum investment criteria they look for in their ideal acquisition target, but I recommend also establishing separate criteria that serve as the gating mechanism for taking that first owner call. An example of this criteria would be the following:
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