Take Five #034: How to REALLY speak to a seller (and prevent your deal from blowing up) & more
Codely v2.0 public release is here
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What has changed in our latest release?
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All new features available for all public channel users
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Coding collaboration with over 200 users at once
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Real-time code save every 0.1 seconds
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Take Five #034: How to REALLY speak to a seller (and prevent your deal from blowing up) & more
1. How to REALLY speak to a seller (and prevent your deal from blowing up)
“To the seller, their company is not an object to be traded nor is it an instrument to drive returns. It is a living creation, with people they care about, in which they have invested years of their life, and (in their eyes) it's value is inherent - no matter where the TTM lands".”
2. Process mapping, people mapping, and cost pro forma: figuring out the cost to replace business owners
Great writeup (with detailed example charts!) from Guesswork Invest on how they determined what it would cost to replace the owners of their new acquisition:
Before figuring out how to replace the owners, you need to (deeply) understand what everyone even does at the business.
In any deal, figuring out how “how they make money” is my first priority for the first meeting - I wrote it about this nearly 18 months ago.
When you’re post-LOI in particular, this should become very granular. Here are some examples of process steps for a typical service contractor, along with questions you should be able to answer:
Customer finds them (Through what channels? All organic, some paid, mostly paid, etc? Who manages marketing?)
Customer contacts them (How? Web? Phone call? Text? Email? How fast do they respond?)
Quoting process (In-person / online / over phone? Who is capable of giving quotes? How are they delivered?)
Customer accepts quote (How do they accept? Deposit taken?)
Job is scheduled (Who does this? How many service visits per customer? What factors go into scheduling? Who handles staffing for jobs?)
Job Prep (Do client reminders go out? Do supplies need to be ordered? What prep work is needed? Who does all this?)
Job Day (How does dispatch work? Who talks to client? Who confirms work is completed properly?)
Invoicing (Who sends invoices? What are payment options & terms?)
Collections (Who handles collections? How common are non-paying customers?)
Admin & Bookkeeping (Who ensures accounting is correct? Who deposits checks? Who does taxes? Who maintains business licenses, sales taxes, etc.? Who handles payroll?)
From “Pro Forma Payroll in SMB” by Guesswork Invest
3. All aboard the lifeboats! Join the SMB Twitter backup community (in case the Tweetship goes down)
SMBAcquisitionAttorney @SMB_Attorney
4. The primer you’d want to send your friends to educate them on how buying a business works:
5. “How’s the search going?” A detailed two month recap by a searchfunder in Southern California:
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