Deal Sourcing and Getting Started- Deeper: Use A Private Equity Fund to Buy or Sell Your Next Business
This Week On How2Exit, Chatting With Two M&A Leaders - DEEPER - Private Equity Funds
Reconciled provides industry-leading virtual bookkeeping and accounting services for busy business owners and entrepreneurs across the US. Their team is experienced in M&A, and they hire the best talent available. Reconciled sets the standard for consistency and quality that you can count on.
Want to Network with other Acquisition Entrepreneurs and professionals - Join Here
Don’t Be Stuck -
If you are seeking professional help to move your M&A game forward, reach out, don’t be stuck after interviewing over 170+ pros, Click here → We Know A Guy!
This week on How2Exit:
E149: Bill Snow: From Sales to Mergers and Acquisitions Expert - Watch Here
About The Guest(s): Bill Snow is an author and mid-market investment banker with over 20 years of experience in mergers and acquisitions. He is the author of "Mergers and Acquisitions for Dummies" and has worked on various transactions in the middle market space. Bill Snow is currently with Focus Investment Banking, a firm that specializes in middle market investment banking.
Summary: Bill Snow shares his insights into the world of mergers and acquisitions (M&A) and provides valuable advice for those interested in this field. He emphasizes the importance of understanding the financial aspects of M&A, including reading balance sheets, income statements, and cash flow statements. Bill also highlights the significance of being able to analyze and interpret financial data accurately. He discusses the cyclical nature of businesses and the importance of considering working capital and cash reserves when evaluating a company for acquisition. Bill concludes by emphasizing the microeconomic nature of M&A and the need for business owners to focus on what makes their company valuable, rather than solely relying on the state of the overall economy.
Understanding financial statements and being proficient in math and accounting are essential skills for success in mergers and acquisitions.
The cash flow statement is a crucial tool for evaluating a company's financial health and understanding the nature of its profits and expenses.
Businesses often have cyclical patterns, and it is important to consider these cycles when evaluating a company for acquisition.
Working capital and cash reserves play a significant role in determining the value of a company and should be carefully analyzed during the M&A process.
The microeconomic factors of a company, such as its growth, profitability, and management team, have a more significant impact on its value than the overall state of the economy.
"If you're a young person, get hired by a venture-funded business and work your way up there." - Bill Snow
"It's impossible to time the market. And it doesn't really matter what's going down with the economy." - Bill Snow
"Focus on your company. If you want to sell a company, if you want to exit at some point, focus on what makes your company valuable." - Bill Snow
Bill Snow: The Art of Mergers and Acquisitions
In a recent episode of the How2Exit podcast, host Ronald Skelton interviewed Bill Snow, author of "Mergers and Acquisitions for Dummies" and an experienced mid-market investment banker. Snow shared his journey into the world of M&A and discussed the key insights he has gained from overseeing numerous deals. In this thought leadership article, we will delve into the main themes discussed in the interview, providing an in-depth exploration of each theme using verbatim quotes from the transcript. We will analyze the implications of these themes and discuss their potential impact on the M&A landscape.
The Unplanned Path to M&A
Snow's journey into the world of mergers and acquisitions was not a planned one. He emphasized the importance of being open to different opportunities and being willing to adapt to unexpected circumstances. He shared how he stumbled into the field of investment banking after initially turning down the job offer. Snow's experience highlights the unpredictable nature of career paths and the need to seize opportunities when they arise.
"If you put a plan together, people always say, 'I want to do what you do.' And I always wonder why the hell's, what the hell's wrong with you? Why'd you want to do this? And in life you gotta be open to different things that show up and other opportunities that show up. And sometimes it's not forecasted." - Bill Snow
The M&A Process: A Step-by-Step Guide
Snow emphasized the importance of having a well-defined process when it comes to mergers and acquisitions. He outlined the key steps involved in executing a successful transaction, from putting together the materials and reaching out to potential buyers to negotiating the letter of intent and conducting due diligence. He also highlighted the need for flexibility in the face of unexpected challenges and delays.
"When you see the end goal, okay, a closed transaction and a wire transfers and you get paid for the work and so forth. When you see that goal, then you can fill in, backfill in all the steps that are needed to get there." - Bill Snow
The Challenges of Selling Small Businesses
Selling small businesses can be more challenging than selling larger ones. Snow explained that buyers are often more interested in making bigger acquisitions that offer greater returns on their investment. This can make it difficult for sellers of smaller businesses to attract the attention of potential buyers. Snow also highlighted the importance of understanding the specific dynamics of the business being sold, such as customer and supplier concentrations, in order to navigate the sales process effectively.
"Selling the smaller deals is a little more difficult... It's going to take the same amount of time, whether you buy half a million in EBITDA or 5 million. It's going to cost the same. It's going to be even more difficult to buy the smaller transaction. So why burn all those calories for half a million, million dollars in earnings?" - Bill Snow
The Role of Investment Bankers in the M&A Process
Investment bankers play a crucial role in the mergers and acquisitions process, particularly in the mid-market space. Snow explained that investment bankers make a market for businesses, actively seeking out potential buyers and facilitating the transaction. He highlighted the importance of having a step-by-step process and a team of experts to guide the seller through the complexities of the deal. Snow also emphasized the need for sellers to have a clear understanding of their goals and what they are looking for in a buyer.
"We make a market... We run the process... We want to have a company that's going to be of a size because we need to charge fees that are going to be commensurate, not only for the work, but we'll have multiple people work on it." - Bill Snow
The Importance of Self-Awareness and Skill Assessment
Snow stressed the importance of self-awareness and understanding one's strengths and weaknesses. He encouraged individuals to be honest with themselves about their skills and to focus on what they are good at. He also highlighted the value of recognizing what one is not good at and finding team members or partners who can complement those weaknesses. Snow emphasized the need for continuous learning and growth throughout one's career.
"What are you good at? What are you bad at? That's something that I think very few people have a good handle on... Very few people have an ability to say what I'm not good at, what I don't like." - Bill Snow
The Power of Storytelling and Vision
Snow discussed the importance of storytelling and vision in the world of entrepreneurship and mergers and acquisitions. He highlighted the need for entrepreneurs to be able to communicate their vision effectively and enroll others in their ideas. Snow emphasized the power of storytelling in creating a compelling narrative that resonates with potential investors and partners. He also emphasized the need for entrepreneurs to be adaptable and open to new opportunities.
"Nothing proves it like the market... Show me you've got product market fit, you're growing revenue, people are paying for your service. Now we know you've got something." - Ronald Skelton
The Importance of Financial Skills
Snow emphasized the importance of financial skills in the world of mergers and acquisitions. He highlighted the need for individuals to be proficient in accounting, math, and writing. Snow explained that being able to read and analyze financial statements is crucial for understanding the value and potential of a business. He also emphasized the importance of being able to assess working capital and understand the cyclical nature of businesses.
"But the test is take a balance sheet, take an income statement. You can look up publicly traded companies. You'll need two balance sheets and two income statements, starting and ending same period. And then build this thing called a cashflow statement. And until you can, until you can do that, you don't have the right skills." - Bill Snow
Conclusion and Future Outlook
In conclusion, the interview with Bill Snow provided valuable insights into the world of mergers and acquisitions. Snow's journey highlighted the importance of being open to unexpected opportunities and continuously learning and growing. The discussion of the M&A process shed light on the steps involved in executing successful transactions and the challenges of selling small businesses. Snow's emphasis on self-awareness and skill assessment underscored the importance of understanding one's strengths and weaknesses. The conversation on storytelling and vision highlighted the power of effective communication in the world of entrepreneurship. Additionally, Snow emphasized the importance of financial skills and understanding the cyclical nature of businesses. As the M&A landscape continues to evolve, these insights will be invaluable for aspiring entrepreneurs and seasoned professionals alike.
Your business Here - email firstname.lastname@example.org
If you are looking to exit above $5M up to $25M - This is the right solution: Together with ITX M&A Marketplace - click here to sell your MSP Company (Sponsor)
The Hub Main Street M&A - News Newsletter
Attention Business Brokers, Advisors, Acquisition Entrepreneurs, and SMB Owners!
Do you want to stay ahead of the game in the SMB M&A market? The Hub is the solution you need! This curated newsletter brings you the best highlights from blogs, podcasts, YouTube, and news sources, all in one place. The HUB
Founding Member Shout-Out
Shout out to our new founding member, with over 30 years in M&A this company offers a Resource Center helping you buy good businesses. Very underpriced - get it now before they finish upgrading the site and very likely up the pricing.
Thanks to Sweetview Partners, an Acquisitions company looking to buy Texas-based B2B companies in the $1MM - $30MM revenue range. Click on the logo to check them out.
E150: David Bateman: From Failed Businesses to Successful Deal Maker & Sourcing Expert - Watch Here
About The Guest(s): David Bateman is a deal sourcing expert and co-founder of Just Deal Flow, a company that helps individuals and organizations source off-market deals for mergers and acquisitions. He has extensive experience in entrepreneurship, sales, and marketing, and has successfully acquired and grown multiple businesses.
Summary: Ronald Skelton interviews David Bateman, a deal sourcing expert and co-founder of Just Deal Flow. They discuss David's journey in entrepreneurship and how he got involved in mergers and acquisitions. David shares his experience in acquiring businesses with little to no money down and provides valuable insights on how to source off-market deals. He also talks about the importance of having a mentor and the role of marketing in the acquisition process. David emphasizes the need to take action and overcome imposter syndrome to succeed in the acquisition space.
Sourcing off-market deals can be a highly effective way to find acquisition opportunities.
Building relationships and networking are crucial in the acquisition space.
Cold calling, social media marketing, and joining business for sale groups are effective strategies for sourcing off-market deals.
Having a mentor can greatly increase your chances of success in mergers and acquisitions.
Taking action and overcoming imposter syndrome are essential for success in the acquisition space.
How to Source Off-Market Deals: Insights from a Deal Sourcing Expert
Welcome to the How to Exit podcast, where we delve into the world of small to medium business acquisitions and mergers. In this episode, we have a special guest, David Bateman, a deal sourcing expert with extensive experience in the field. David shares his journey and expertise in finding off-market deals, offering valuable insights for those looking to buy or sell a business.
The Origin Story
David's journey began in college, where he initially pursued a degree in finance and investment banking. However, his entrepreneurial spirit led him to drop out and start his own businesses. He experienced both success and failure, learning valuable lessons along the way. Eventually, he found himself in the world of mergers and acquisitions (M&A) through a chance encounter with a company called Acquisitionpreneur.
The Power of Mentorship
David credits his success in deal sourcing to the mentorship he received from Aaron Aegis, a prominent figure in the M&A industry. Aaron provided guidance and support, teaching David the ins and outs of acquisitions. This mentorship was instrumental in David's ability to close deals and build his own portfolio of businesses.
The Birth of Just Deal Flow
Inspired by his own journey and the power of mentorship, David teamed up with Ben Peary, another expert in deal sourcing and marketing. Together, they founded Just Deal Flow, a company that offers a one-stop-shop for deal sourcing and transaction support. Their goal is to provide personalized assistance to clients, helping them navigate the complex world of acquisitions.
How to Source Off-Market Deals
David shares several strategies for sourcing off-market deals, emphasizing the importance of taking action and being persistent. Here are some key approaches:
1. Social Media Marketing
Utilize social media platforms like Facebook and LinkedIn to target specific industries and locations. Create videos or posts introducing yourself as an investor and specify the type of business you are looking to buy. Leverage the power of social media advertising to reach potential sellers and generate leads.
David explains, "You can use social media platforms like Facebook and LinkedIn to really target specific industries and locations. You can create videos or posts introducing yourself as an investor and specify the type of business you are looking to buy. And then you can leverage the power of social media advertising to reach potential sellers and generate leads."
2. Cold Calling and Email Campaigns
Reach out directly to business owners through cold calling and email campaigns. Craft personalized messages that highlight your interest in acquiring their business and the value you can bring. Be persistent and follow up with potential leads to build relationships and establish credibility.
According to David, "If you want to get in touch with potential sellers, you can reach out directly through cold calling and email campaigns. Craft personalized messages that highlight your interest in acquiring their business and the value you can bring. And don't be afraid to be persistent and follow up with potential leads to build relationships and establish credibility."
3. Networking and Referrals
Tap into your personal and professional network to find potential sellers. Share your acquisition goals with friends, family, and colleagues, and ask them to refer you to anyone they know who might be interested in selling their business. Networking events and industry conferences can also be valuable for making connections.
David advises, "Networking and referrals are also great ways to find off-market deals. Tap into your personal and professional network and share your acquisition goals with friends, family, and colleagues. Ask them to refer you to anyone they know who might be interested in selling their business. And don't forget to attend networking events and industry conferences to make valuable connections."
4. Online Business-for-Sale Groups
Join online business-for-sale groups on platforms like Facebook and LinkedIn. Engage with the community by posting about your acquisition criteria and actively participating in discussions. Be consistent and proactive in your engagement to increase your visibility and attract potential sellers.
According to David, "Online business-for-sale groups on platforms like Facebook and LinkedIn can be a goldmine for off-market deals. Join these groups and engage with the community by posting about your acquisition criteria and actively participating in discussions. Be consistent and proactive in your engagement to increase your visibility and attract potential sellers."
5. Utilize Data Sources
Leverage data sources like Google My Business and Reference USA to gather contact information for businesses in your target industry and location. Use this data to reach out to potential sellers via phone, email, or direct mail campaigns. Personalize your messages to increase the likelihood of a response.
David suggests, "Utilize data sources like Google My Business and Reference USA to gather contact information for businesses in your target industry and location. Once you have this data, you can reach out to potential sellers via phone, email, or direct mail campaigns. Personalize your messages to increase the likelihood of a response."
The Power of Taking Action
David emphasizes the importance of taking action and being proactive in the deal sourcing process. He encourages aspiring buyers to set aside dedicated time for outreach activities, whether it's making calls, sending emails, or engaging on social media. Consistency and persistence are key to building relationships and finding off-market deals.
As David explains, "The key to successful deal sourcing is taking action. Set aside dedicated time for outreach activities, whether it's making calls, sending emails, or engaging on social media. Be consistent and persistent in your efforts. Building relationships and finding off-market deals takes time and effort."
Conclusion and Future Outlook
Sourcing off-market deals requires a combination of strategic marketing, networking, and persistence. By leveraging social media, cold calling, referrals, and online platforms, buyers can connect with potential sellers and uncover hidden opportunities. Mentorship and support from experienced professionals can also play a crucial role in navigating the complexities of the acquisition process.
As the world of mergers and acquisitions continues to evolve, deal sourcing experts like David Bateman and his team at Just Deal Flow are well-positioned to assist buyers in finding the right opportunities. With their comprehensive approach and personalized support, they are empowering individuals and companies to successfully navigate the world of acquisitions.
In conclusion, the key to successful deal sourcing lies in taking action, building relationships, and leveraging the power of mentorship. With the right strategies and support, buyers can uncover off-market deals and achieve their acquisition goals.
Note: This article is based on a transcript from the How to Exit podcast episode featuring David Bateman. All quotes and insights are directly from the transcript.
Cell: 215-847-5270 (I’m an open book, shoot me a text and let’s talk)
ISO - Seeking profitable B2B newsletters, blogs, social media groups, etc, must have over 5000 subscribers, be more than 18mo old, and be profitable. Submit here or Contact Ron email@example.com
ISO-seeking business owners looking to grow and accelerate Valuation to retire wealthy within 2-5 years. May play a key spot in rollup if you qualify. Must have a profitable business, $2M-$10M, >=10 years in business. Contact: Gia@CashOutWealthy.com
Your Ad Here - $50 / week 240 characters - send requests to firstname.lastname@example.org
This week’s “DEEPER” Dive: Use A Private Equity Fund to Buy or Sell Your Next Business
Ace Chapman, an acquisitions entrepreneur and private equity fund manager, shares the key to creating a private equity fund that you can use to acquire businesses. Private equity funds are proven to accelerate business acquisitions and rollups.
We interviewed Ace Chapman in the episode “Mentor Mini Series E6”- Watch it here.
In this article, we talk about raising capital to acquire businesses. In the interview, Ace explains he helps his buyers raise capital to acquire his businesses when selling. To learn more about this process and PPMs (Private Placement Memorandums)…
Read the full article with a paid account by the Author, Yoseph Israel
Let’s get into it…
Read the full article, with a paid account. Click the share below and tag me in your share to get a paid account for a week, refer 3 people (DM me on Linkedin who you got to sign up), and get a paid account for 90 days. Get 10 signups - FREE FOR A YEAR.
FROM THE Editor:
Disclaimer: This newsletter is provided for informational & educational purposes only, and should not be relied upon as legal, business, investment, or tax advice. We are not attorneys, tax, or financial advisors and not qualified to give any such advice.
** indicates an affiliate commission will be paid if you buy something.