How to Build a Dealmaking Network
Hey dealmakers,
Welcome to the Better Business Brief, where I share takeaways from:
- running a business I’m building to sell for millions
- my consulting with business owners building to sell for millions
- tips and tricks you can use to do the same
Over the last year, I’ve spent a lot of time and energy curating an intentional network around my consulting practice. This is because naturally, there will be things I’m not great at and also things I don’t know much about. I need to be able to call on people to help fill those gaps and get help. While my network will always be growing, I have reached a place where I have some great people around me, advising me, helping out with various functions of what I or my clients need, and informing me about things. I think sharing this will be valuable for all of you because I have realized that knowing all of these people unlocks opportunities that wouldn’t be available otherwise.
So today, in less than 5 minutes, I’ll give you:
🕴️ 5 People You Need in Your Network as a Dealmaker
🤓 Why Each is Important in Your Process
📖 Some Details to Look for With Each
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This won’t at all be an exhaustive list, because in reality, there are dozens or more different kinds of people you need here, but I’ll hone in on a key few that have been important for me:
For me, business brokers serve a few purposes. I partner with a number of them in different areas, by both location and geographic area. This is because they all work different markets. Because I stay in touch with a number of them, I am able to be flexible. If I have a client that wants to sell in a different state, I immediately know who to connect them with or how to find them. Brokers also usually each have an invemtory of businesses for sale that they can tap into. This means that if I have a client looking to grow their business by acquiring another, I can tap into this network to help me find a business. Another huge thing with business brokers is that they are IN THE TRENCHES with business sales, so I often find they have the best and most current information when it comes to trends and opportunities. I like to ask them questions about what they are seeing so I can look for patterns and let it inform my strategy.
High level ones, not just beginners. Because business transactions are a complicated game, you need CPAs that have actual experience with them. The ones I partner with know the ins and outs of how to value a business, don’t just rely on standard industry multiples, and know how to tell a story with the financials of the business. This is important because even if you’re a numbers person, you won’t think of everything. These CPAs can help you find opportunities in your business or someone else’s, but can also help you avoid getting involved with a business that is problematic. Bonus points if you can find CPA’s that have experience as a CFO and can serve as a fractional or full-time one for a client or for yourself.
There’s a specific type of lawyer to look for as well, and these are rarer than you’d expect. It took me a while to find this guy, but then I found two. Ideally, you need a lawyer that has a lot of experience with mergers and acquisitions, but also has experience as a business owner themselves. Let me explain why… The M&A experience speaks for itself. This allows them to bring better strategies and important details to the table for any contracts that are being put together. At the end of the day, the contracts are the word of law on any deals you do. However, many lawyers will purposely try to find as many details to add and deliberate over as possible in order to run up their tab. This will KILL a good deal. You need a lawyer with M&A and business owner experience because they will know this game but will also be able to put themselves in everyone’s shoes so they can find the balance of protecting interests while also getting a deal done.
These can be magical. The right SBA lender can make opportunities appear out of thin air for you as a dealmaker. Ill explain. For me, I focus on one thing, which is making someone’s business more sellable. If someone comes to me with a business worth $500,000 and want to make it worth $1 million, one of the quickest, most efficient, and least risky ways to do that is with a well structured acquisition of another company worth about $500,000. SBA lenders allow you to make something like this happen without having all the cash up front. They will often fund up to 90% of the purchase price of a business, allowing you to give the previous owner a good price and comfortable exit while also acquiring a really good business. The thing about SBA lenders is the more you know, the better you’ll be. They all operate within SBA guidelines, but within that, they all have different risk levels and things they will and will not fund. So the more you know, the more potential deals you can do. Look for ones with a strong history of closing deals, and specifically ones that will fund businesses of the type you’re looking into.
5. Other Business Owners/Partners: |
Ok so this one is pretty broad, but the point here is that you can’t do this alone. Aside from the service providers I’ve described above, you really need other people working on deals with you. You need a second or third set of eyes to look at a deal, you need someone to bring ideas you didn’t think of yourself, and you need someone to help you with selling. Personally, for me, I found someone (well, a few someone’s) who have past experience as a business owner buying and selling businesses. There really is no substitute for having experience doing the actual thing, so this brings insights to the table for you that really help you do more. The type of partners you find will depend on where you have personal weaknesses. Be honest about your deficiencies and look for someone who excels in those areas. As a last note here, find partners who will keep you accountable. This is a game where consistency is paramount to having any success, and you need people that are gonna hold you to a high standard.
Those are just a few of the types of people you need to know to be an effective dealmaker. I’m happy to introduce you to the great people in my network I’ve described above to help you in your journey. If you want to know more, or ask questions about any of these, I am doing a free online workshop this Friday, June 14th at 7:30PM EST on being an effective dealmaker. I will be covering how to make a business sellable while my partner Andrew covers how to buy businesses creatively. Bring questions, concerns, and topics you’d like covered. The workshop is free and online, and you can sign up right here on Eventbrite.
Be great. Keeping growing and aspiring. And as always: I hope you got something from this.
If you did, share it with a friend who may too, as this is the best way for me to grow it and make this better.
They can even sign up here :)
Happy value-building to all of you!
See you next time for Better Business Brief,
-Brody
If you are considering selling your business soon, let’s talk. Grab some time here and we’ll make sure your plan is on track.
