Page 10 - NBIZ December 2023

Step 2: If one is not 100% sure that he/she is interested technology, market share, etc. They should
in selling one’s company now or for the next several years, readily share their search profile with you.
then file or trash the inquiry according to the following u Introduce yourself and your company in the
guidelines: same way one would introduce him/herself to a
• Investment Bank or Broker Inquiries: These inquiries potential new customer or hire.
can be trashed. The veneer of working with buyers is u The sender will ask questions about you and
meant to conceal the fact that the sender is simply fishing your company. Follow the “New Customer or
for clients. Bankers or brokers will not be hard to find Hire Rule” when answering any questions.
when the time comes, so usually there is no need to hold If the question asks for information that you
onto these inquiries. would comfortably share with a potential
• Search Agent Inquiries: These inquiries can also be customer or new hire candidate, then answer
discarded. Search agents are typically employed by PE that question. If the question asks for infor-
firms. They are given broad search parameters and typical- mation that you would not typically provide a
ly work for many different buyers. In the near term, these potential customer or hire, then politely decline
inquiries provide very little information about the level to answer at this time. (Common examples of
of interest, and the agent will resist telling the business information that you do not share includes your
owner who the actual buyer is until after he/she has wasted company revenue, profits, customer names, key
a lot of time. There is little value in saving the inquiry employee names, ownership structure, growth
because, by the time you are ready to sell, the agent will be
on to other searches and industries.
• PE Inquiries: These inquiries indicate that the PE firm
has a genuine interest in the same industry. Create a file
and name it “Future Buyers List.” Store private equity firm
inquiries there. If the firm is successful, it likely will still Common
be in the market for acquisitions when one is ready to sell.
• Strategic Buyer Inquiries: Store these inquiries as well examples of
in one’s “Future Buyers List” file. Sometimes the business
owner may already know about the buyer if they are in
competition. Nevertheless, save the actual inquiry because information that
it will have contact information for the person to reach out
you do not share
to when it comes time to sell.
Step 3: If the business owner might be interested in
exploring the sale of his/her company in the near term, take includes your
the following actions:
• Look up the inquirer online either on their website or at
LinkedIn to gain more information. Search if their com- company revenue, profits,
pany has made other acquisitions and announced those
purchases in the media. customer names,
• Reply to the inquiry to gain more information. The inquirer
will want to set up a call or meeting—try to limit this to key employee
a call because that takes less time and in turn reduces
the risk you will say too much. Experienced buyers know names,
that many sellers usually say too much too soon and take
advantage of this. ownership
• During the call, stick to these points:
u Ask or verify who the sender is if you don’t know structure,
already.
u At some point they will ask why you agreed to take growth
the call. State that your company is not for sale (which
is true—they contacted you) but as a prudent owner strategy, etc.
you keep an eye on the market.
u As early as possible into the call, ask what is their
search profile? This potential buyer will have a list
of characteristics that they are looking for in an
acquisition, such as company size, location, growth
rate, operating method, team credentials, proprietary

10 NBIZ ■ December 2023