02 Jan Motivated Sellers: Buying a business at a discount
Most people who are pretty well off are more that willing to say that the first million dollars is the hardest to make. One major factor playing a role in this is the educational process that is taking place as you learn the concepts behind closing a deal, another is the time it takes to build the trust and relationships with other reputable persons who are prepared to close a deal. The point that I would emphasize is the preparedness to execute when a deal becomes available.
Most business owners that are looking for and exit strategy have a reason for wanting to sell, in some cases, they need to sell and they need to sell fast. If you have the money, the connections, and the resources available to you then you can execute right away. This catches the attention of the seller because he has a relatively fast way to liquidate his business so he is willing to take a discount and the buyer can buy a business at a discount. If he had to wait longer then the seller might find someone else who will take it out from under your feet.
One of the M&A Deals that recently came through Deal Capital went particularly fast. As Deal Capital has developed partnerships with various private equity groups, when one deal comes along these groups are the first points of contact, the first people to know of an opportunity. When this motivated seller expressed his interest or need to exit the business quickly due to personal reasons, one of the Deal Capital partners was able to pick up the company at a particularly low rate. Very shortly after getting the company under a terms sheet contract many other groups expressed an extraordinary amount of interest but were too slow. This is why it is so beneficial to have everything prepared and to have the right connections.