It’s Tuesday night — way too late for me. I should be sleeping, but I’ve got biz buying on my mind.

I had a follow-up call with the owners I met in person in November. It went great.

The best advice for negotiating off-market

Coming off my first in-person visit, I planned to be pragmatic with my follow-up. Here’s what I wrote in my update discussing my plan:

In preparation for the conversation, I sent an email to a Hold Co owner I really respect, whom I met at the Main Street conference this fall. His name is Ben.

He’s bought multiple off-market businesses and understands where I’m coming from — he’s been there and done that many times already.

So, I asked him what he thought about my negotiation strategy.

He graciously responded with excellent, timely advice. His advice was:

This was a lightbulb for me. This is the whole point of searching off market!!!

Why would I go into the conversation and immediately pit myself against the owner after a fantastic start to our relationship? What a foolish plan!

No, no, no. I need to focus on building the relationship so that if and when we get to a negotiation, we’re working together to make it happen, not against each other. I want him to want it, too.

I need to focus on him believing I’m the guy he wants to continue his legacy.

I took Ben’s advice.

How my conversation went

After I got this email and read it three times, I shot a text off to the owner.

Hope you had a great vacation. Looking forward to touching base when it is convenient for you.

He responded right away.

Free now?

We hopped on a FaceTime call and chatted for 30 minutes. We talked about their vacation, my vacation, etc. Then I shared what was on my heart post-visit.

I made sure to speak candidly and not hit hard on anything price-related.

They shared their perspective on our visit, too.

And, honestly, the call went perfectly.

In their words, they want to make sure the business transitions to someone who’s set up to be successful. No crushing debt payments, no critical information or detail lacking

Is it too soon for me to say I love them? Because I love them.

They are salt of the earth, good people. And, honestly, it’s a joy to get to know them.

I think the feeling was mutual. After our conversation he sent me a text:

We are feeling blessed to know you.

I sent him my Christmas card.

Ben approved. 🙂 

Where we go from here with this business

I’m working on typing up all the ideas I have in my head to grow their business (I have a lot!). I’m going to give it to them. I doubt they’ll do anything with it (they’re tired), but it will be another proactive step to building our relationship.

They said they’d like to sell this business in the next two years.

I personally feel they may get the itch to do something before then.

Either way, I will continue hanging around, learning what I can about the business, being helpful, and investing in the friendship.

The Great Depression

I finished a great book this week. I loved it so much, that I thought I’d share a couple takeaways. It’s not directly related to my biz search, so feel free to skip this section if it’s not of interest.

The book is a day-by-day account of the Great Depression written by an Ohio attorney.

It taught me that the financial and geopolitical climate we live in today is very mild compared to what we’ve experienced in the past.

The unrest in the 1930s is unparalleled since. Here are a few examples.

• Angry dairy farmers who couldn’t pay their property taxes with low milk prices poured out raw milk on busy roads in protest (while much of the country struggled to get food).

• At sheriff auctions, farmers intimidated anyone who showed up to bid on their land (for which they couldn’t afford to pay property tax). In one story, farmers pulled a judge off a bench, tied a rope around his neck, and threatened to hang him for overseeing an auction.

• WWI veterans camped out on Capitol Hill to campaign for an early release of a promised war bonus. It turned violent and the police shot multiple protesting veterans, killing one.

• World order was jeopardized as Hitler campaigned throughout Europe and England, alone, defended democracy in Europe. Americans sat on the sideline watching Europe under siege, anticipating involvement in a second world war while still grappling with the Depression.

But I found so many insights into buying businesses. Over and over again the following appeared:

• Predictions are crapshoots. Good, negative, and neutral. Predicting the future of the market is impossible.

• Investors with long-term plans weather short-term storms.

• The author says multiple times courage, capital, and preparation are key to capitalizing on down markets. “Opportunity is a stern goddess who passes up those who are unprepared with liquid capital.”

More than anything, the book reinforced human nature has changed so little in the last 100 years.

People are irrational. Time moves slowly in the moment and quickly in hindsight. Great investments are made by the prepared.

What’s next for me

I’ll most likely skip next week’s update in lieu of Christmas. I’m looking forward to spending time with my family, and I hope you are.

I had an interesting conversation with an owner of an online course business for teachers. I’m excited about it, and I’ll tell you more about it next time.

I also have a call scheduled with the owner of a blog about luxury vacations. It should be interesting.

I got mostly “no’s” when I asked last week if my weekly update was hard to follow. In other words, most of you thought it was easy to follow week-to-week. I was surprised.

I’m working on compiling more anonymous information about the businesses in my pipeline. I’ll have something to share in the next couple of weeks.

Thanks for reading!

Mike