SECTION 2 OF 2
Finding a Company to Purchase
Some people acquire their company in the skilled trades as part of a succession plan. Some are offered one to purchase—sometimes even the one they work for.
But those who have to find one to buy—prospecting, as it is often called in the investment world —know it can be the hardest part of the acquisition process.
There are a couple of interesting strategies that have worked for contractors and investors.
Constant touches: Contractors seeking to “tuck-in” businesses, meaning purchase a business in the same geographic area and assimilate it into their own, typically have some kind of constant contact campaign. Many send out letters every six months to every contractor of interest in their area, reminding them they are looking to purchase businesses. The initial setup takes time, but once the letter is written and the distribution process is complete, the program goes on auto-pilot.
If you have the email addresses of the target companies’ owners, ServiceTitan’s Marketing Pro can automate emails at a given interval. You would need to set them up as a customer in ServiceTItan to do it, but it will automate the process.
Hire a broker: In an area where you aren’t familiar with other contractors, acquiring a broker might be the way to go. Brokers usually charge a percentage of the sale of a business, but they also typically do a lot of the legwork. In many cases, they know companies looking for buyers. Using a broker might require being flexible on where the company is located.
Buying a company is usually a lot more like farming than like hunting. Many times, desirable companies aren’t available immediately, but at some point they will be in the future.
Lee’s Air Conditioning, Heating and Building Performance in Fresno, Calif., for instance, once approached a prospective shop about purchasing their company—a sale that didn’t happen until four years later, when the seller decided it was finally time to step out.