Whether you’re looking to buy your first business or you have a growing portfolio, understanding what business sellers are thinking is essential. After all, if you’re going to approach a business regarding a sale, it’s vital to understand what will appeal to them. Are they in need of a change, a new challenge? Have they done everything they can (or want) to do with their business and plateaued? Do they need a significant injection of capital for another venture? In short, what’s their current issue?
Pain points are the reasons why someone might be considering selling their company. Marketers also use this technique to demonstrate how their product or service will solve those problems. However, convincing someone to sell to you is a little different.
Unlike in marketing where target demographics for most products and services share similar situations and circumstances, sellers do not. So what do business owners have in common that would make them want to sell? This is a question of personal circumstance rather than lifestyle, career, age, gender or other shared demographics that unite the prospects of a product or service.
There are a multitude of potential pain points. Some business owners may be looking to retire with a nest egg to fund their next adventure. If it’s a local business and they’re looking at moving out of the area, it may not be viable for them to maintain it from a distance. Some may have found their industry changing in a direction they don't like. Others may have grown their business to a scale they can't manage themselves. In some cases, financial difficulties may mean someone wants to sell out of necessity, reluctantly.
One thing we do know in 2022 is that business sellers are tired of the standard pitch. Nobody is interested in reading an email from a person they’ve never heard of when the subject line is simple ‘We’re looking to buy a company just like yours’. That isn’t focusing on the seller’s pain point, the reasons they may have to sell. Instead, it focuses on the buyer’s need or desire. Although that works when you’re marketing a product or service, when you’re trying to buy a business, you need to reverse it. Conducting research into the business, its market and customer demands is key as this will help you strike your pitch accurately.
What business owners are looking for is an approach specific to them and their business. After all, many business sellers built that company from scratch. Not an easy accomplishment. There’s a level of trust needed before they will entertain the idea of selling, even if they are eager to make the sale. This means you’re going to have to have a connection and a level of trust built up with business sellers if you’re hoping to stand out as a prospective buyer.
Building personal connections and relationships ahead of a sourcing campaign is key. Taking the time to get to know the business owners you’re hoping to solicit allows you to understand their pain points and tailor a pitch that will actually appeal to them and their specific circumstances. At the same time, the fact they’ve come to know you will build a level of trust that will allow them to consider the sale in earnest.
When you know what pains they are suffering, and what struggles they are facing, you can frame the sale of their business as the solution to their specific issues. And we guarantee they will be more receptive to selling if you do.
What are business sellers thinking in 2022? That if they’re going to part with their company, it needs to be to the right person, for the right reason. You’re never going to convince them of that without first getting to know them personally. Speak to us at GVP Partners today to find out how to approach business sellers successfully.