Take Five #131: Navigating the offer process, including some key steps, what to avoid, and more
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Take Five #131: Navigating the offer process, including some key steps, what to avoid, and more
1. How to boost revenue by identifying and maximizing high-value clients
2. Podcast Interview: Creating a measurable, data-driven workplace culture
Jim Derry, CEO of Field Fastener, discusses how to define, develop, and measure company culture.
3. How some of the world’s oldest businesses have survived and thrived for centuries
The secrets behind centuries of success
Commitment to core values and quality. Whether it’s Zildjian’s secret alloy formula or Beretta’s craftsmanship, these companies preserve what makes them unique, building deep trust and loyalty among customers and employees.
Balance of tradition and innovation. While respecting their heritage, these companies avoid being stuck in the past. Lloyd’s of London continues to innovate in risk management, and Zildjian blends modern production techniques with traditional craftsmanship. This balance allows them to stay relevant and competitive in an ever-changing market.
Strong relationships and community engagement. Maintaining strong relationships with customers, employees and communities is essential. Companies like Lloyd’s of London and Radio Flyer invest heavily in these relationships, fostering a loyal customer base and creating a supportive environment that helps them weather tough times. Active community involvement further enhances their reputation and stability.
Find the rest of Chase Murdock’s post here.
4. Post-acquisition hurdle: No-experience new owner needs to hire new employees
5. Navigating the offer process, including some key steps and what to avoid
Early in your search, you want to start off with low anchor points. You can’t afford to overpay for the business you buy and need to gain experience for what your investors will finance and what to expect from sellers. You would rather have a good business at a great price than a great business that you are overpaying for. Avoid the tendency to focus too much on what the seller is “asking for”. Instead, offer a below-market valuation that will be the beginning of a negotiation. Jon Blanchard, searcher/CEO at Arden Bay warns, “Know what you’re able to offer. Have clear expectations with the investors, bankers, accountants, and others you work with, to understand what all of those who are supporting/financing your search are comfortable with, before you box yourself into a position with the sellers.”
“Anchor” your offer low on total valuation and high (50%) on the seller note. This is the start of a protracted dialog with the seller, who probably has never experienced selling their business before, but has had a lot more practice than you at complicated negotiations. Be prepared for many rounds and much time between each round. Searchers report hating this “dance” of back and forth negotiations. “Practice is key. The best way by far to hone judgement is through repetitions of your offers”, observes one searcher.
Read Jim Stein Sharpe’s post here.
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