Buying a company isn’t as easy as you think - there are a lot of steps to consider and a lot of places where things can go wrong.

Everybody has that dream of owning a company but when a buyer steps into this arena they're going to be hesitant.

Jason and Ron from WebsiteClosers.com have seen their fair share of buyers in their careers, and on today’s episode of Deal Closers - A Tech & Internet M&A Discussion we talk about the process of buying a company. More specifically, we talk about “what makes a good buyer”.

[07:13] What are important things that potential buyers should keep in mind when buying a tech company that maybe buyers of other companies don't need to worry about?

There's a big difference if you're buying a restaurant or a retail storefront, versus buying an eCommerce company;
If it's an Amazon FBA company, you're not holding inventory - it's being held by Amazon and you're basically monitoring listings online and making sure those listings are going the way they should go;
When you compare digital companies to your traditional brick & mortar company, scale is very rarely an opportunity in those kinds of companies. In brick & mortar maybe you can open another location, but you're somewhat limited. If you own a brand online, there's so many ways you can scale it, whether it's on your own website, through social media, through influencers or affiliates, etc.

[10:26] How do they guide a potential buyer from the moment they spot a listing?

You start scavenging through these websites that have listings on them, and you start attaching your email address to the newsletters of businesses that are going out;
When you see something that you think it's going to match what it is you think you'd want to work on, you email the broker and ask them what are the next steps;
The next step is going to be that you need to sign a Non-Disclosure Agreement or a Confidentiality Agreement;
Once you've signed that, then you receive a package that contains a lot of information that can tell you whether you’re interested or not;
From that point forward, you contact the broker and you tell them you want to learn more about the business. Depending on the process, the broker might want to talk to you first, and get a little more info about you and make sure that you're a good fit;
Then you need to get vetted by the bank;
Once you've been pre-approved and you found a deal that you want, then it's time to put in an offer;
Ultimately, we go into what's called, "no shop" - that means the business will remain off the market for a period of time, to get things finalized;

[20:03] What you should do as a buyer, after buying a company?

Keep things and employees status quo;
Keep it in the same location;
Don’t change any of the advertising;
Try to keep everything low key and just sit back and listen and learn;
Take a few months to put a plan together where you'll slowly integrate some of your ideas into changing over time.

[21:10] What are some kind of key factors that differentiate an okay buyer from a good buyer?

Any buyer who's had direct experience in the particular business he's buying, it's perfect;
In addition, if they've got a second source of income - that's A++ best buyer, can't beat them;
The very best buyer is going to be someone who's got that operational experience, somehow, in their background.

Resources:

Websiteclosers.com

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