Almost every seller I work with is selling a business for the first time. They don’t have anything to compare the process to, but they often do have fixed ideas about who the perfect buyer is.
Actually, they mostly have fixed ideas about who the wrong buyer is for their business.
“I don’t want to sell to a Private Equity firm. If it’s a PE guy, let’s move on.”
“I don’t want to sell to anyone without HVAC experience.”
“I don’t want to sell to anyone who’s not local (or anyone who’s out of state).”
I get it. The owner’s probably been thinking about selling for a long time, and they have a scenario in their mind of the ideal sale. Maybe the perfect buyer is a guy with 20 years of HVAC experience and wisdom who’s going to take great care of his technicians and customers. A new owner who understands the market and how we do business here.
Maybe not.
When I accept a listing from someone who thinks they know who the perfect buyer is – or isn’t – I start with a conversation about keeping an open mind. Based on my years of experience, the only buyers we should turn away on principle are those whose character is in question or those whose financial position isn’t strong enough to make a serious offer.
Because you never know what the right buyer might look like.
PE firms are not all alike; they can be as different as individual buyers. They have different investors, portfolios, and acquisition goals, varying levels of industry experience, and distinct models for company management. One PE firm might be a terrible fit, and the next a great fit because they have an experienced management team (or strong marketing strategy or advanced technology).
Strategic buyers are usually a good bet for any seller, because they’ve been successful in starting or running other businesses. Having HVAC experience might be a plus, but it’s not necessary to be a great business owner. They probably have the experience and business acumen to promote or recruit talent to serve as a general manager. They understand that their job is to work on the business rather than in it. They know enough to trust the people they hire, and spend their time and energy in growing the company and making sure it remains profitable.
The same goes for out-of-state buyers. They may already have experience in HVAC or other trades and the capital to invest in expanding their service lines or their territory. And, just like any strategic buyer, they’ll find the best general manager available to run the operation locally while they focus on growth.
So I always ask sellers to take a call with a qualified and motivated buyer, even if they don’t fit the “ideal” pattern. If they have the means to buy and the business sense to run the company, it’s worth the time to get to know them before rejecting them as a prospect. Sometimes, your ideal buyer may not bring the best offer to the table; terms matter as much as the asking price or industry experience.
When I have several prospects for the owner to talk to, it’s not uncommon for them to be sure that call #1 was the right buyer. When they speak to #2, they feel strongly about them, too. Finally, they’ll often tell me, “I thought we could quit looking after the first call. But #3 is really the one I want to do business with.”
The perfect buyer might not be who you think it’s going to be.
