When attempting to purchase a business, it is important to understand that you likely arenít alone. In many cases, there are a number of potential buyers lining up for the chance to acquire a successful business, which can make the process nerve-racking for the average buyer. Buyers must prepare for competition, so that they know how to navigate the buying process and market themselves to the seller.
To start, competitive buyers must realize that some of the most rewarding things in life are often the most challenging as well. Preparing for the most difficult of business transactions will help ease the anxiety and insecurities of a buyer later on. If one is already having such feelings about there being more than just the seller to worry about, they must ask themselves if a business that is drawing no interest from other buyers is truly worth buying. Surely there are businesses that fly under the radar, but considering a business that everyone else wants to buy is a telling sign that you are in the right place.
As you begin the process of buying a small business that has a lot of interested parties, you will want to understand how the owner/seller is operating their process, and determine what is important to them. If you are worried about being the highest bidder, you shouldn't be. The selling price, while important, is going to be coupled with other important features such as deal terms, financing (getting pre-qualified is critical), post-sale terms, and length of time that the whole process will take. When you know what they are looking for, you'll be able to also determine if you are able to meet their needs and requirements, or be able to negotiate an offer attractive enough to make them consider you their ultimate business buyer. Taking the time to get to know your seller will tell you what they are looking for in a deal, and allow you to present a well-rounded reasonable purchase agreement or LOI when the time comes.
From the moment you first introduce yourself to the owner/seller, you are trying to convince them why you are the best candidate to take over their business. The financial and deal terms are important aspects of the process, but a difference in opinion there won't necessarily take you out of the running if you are able to maintain a professional attitude and your composure as a reasonable, motivated business buyer. It is important to remember that you are competing against people (other buyers) because you are marketing yourself just as much as you are marketing your business skills. Nothing will end negotiations quicker than a lack of people skills, unwillingness to find common ground, and a lack of respect. With that being said, it is critical to have a positive attitude, be willing to work together with the seller to make a deal work, and show that you are a genuine person throughout the process of buying a business. If you are able to demonstrate that you are a stand-up individual, you may not only find yourself with a new business, but a seller that is willing to help you transition into the role of a successful business owner as well.
The final area of focus that can help you beat out the competition is having the ability to come prepared and move quickly. The buying process isn't a race, and is a process that requires a lot of hard work, but coming with knowledge of the industry, a plan for obtaining financing (make sure you get professionally pre-qualified by someone who specializes in business purchase financing and work with a long list of potential banks and financial institutions!), and a strong professional team - CPA, Attorney, Finance Specialist, are all ways to speed up the business buying process. An owner/seller doesn't want to wait years to carefully vet a long line of potential buyers, and will appreciate a buyer who knows how the process works, and doesn't have to spend a lot of time working out things that they should have lined up before entering the buying process. You should be able to make and meet timely deadlines that show the business seller you mean business!
Navigating through the buying process when you have a number of (buyer) competitors is a challenging process, but can be made a lot easier if you come prepared, allocate the time to understand the owner/seller, work quickly to close a deal, and market yourself in a professional manner.