Most business owners, particularly those who have founded and grown their company from scratch, are very protective about their firm. It's their baby, and even though they're entertaining the idea of selling it, they want that baby in good hands. They want their employees protected and secure. They want their customers taken care of.
The first question they're going to ask, at least in their own mind, are, 'Who are you?'... and 'How do I know you can run my company the way it should be run? ' They do not want to sell it to a kamikaze pilot who's going to drive it into the ground. That's why it may be best for your lawyer or your (…) accountant to make the initial call on your behalf. You get instant credibility. Or, if you prefer to make the first call, and you detect those questions bubbling around, offer as references the names and numbers of your lawyer, your accountant and maybe one or two of your directors whose names he may recognize. (…)
Another method that is equally good is to send a short letter which includes the profiles of your board of directors, much as you did when seeking your accounting firm. This also gives you instant credibility, and should remove any hesitancy on a prospective seller's part.
What if your prospect cuts to the bottom line, just to see if you're serious? He says, 'Well, I may be willing to sell, what are you willing to pay?' You say something like, 'Oh, three to eight times your after- tax earnings, but of course we have to look at the books. I'd probably do an acquisition audit. But we can talk about that later.' You've sidestepped his probe with an answer that tells him you know what the hell you're talking about, so don't ask any more stupid questions!
Regardless of the deal you eventually hammer out, here's a key point. Make