Approaching owners directly

The short version

• Many owners who would sell have not listed their business. Some have never been asked.
• Reaching them directly means fewer competing buyers, but it takes time and patience.
• Start with businesses that fit your buy box, and reach owners by letter, phone, email or a warm introduction.
• Be respectful, brief and honest about who you are and why you are reaching out.
• Expect most owners not to reply, and some to reply months later.

Why go direct

An owner who has not listed their business is not comparing your offer with a dozen others. You can learn the business at a pace that suits both of you, and shape a deal around what the owner cares about.

The trade-off is time. Many owners are not ready, and some never will be.

Building your list

• Start with your buy box: the industry, size and region.
• Use industry directories, association member lists, licensing boards and local business listings to find companies that fit.
• Look for signs the owner may be thinking about the future: long tenure, an owner nearing retirement or no obvious next generation.
• Keep a simple list with each company, the owner's name, how you reached out and when.

Ways to reach owners

A warm introduction. The best route. An accountant, banker, supplier or customer who knows the owner can introduce you. Owners take introductions far more seriously than cold contact.

A personal letter. A short, signed letter mailed to the owner. It stands out from email and gives the owner time to think.

A phone call. Direct and personal. Ask for the owner by name, and be ready for them to say no quickly.

Email or professional networks. Easy to send, easy to ignore. Works best as a follow-up to a letter or call.

How to sound

• Say who you are, plainly.
• Say why you are interested in their business specifically.
• Say what kind of owner you would be: that you intend to run it and care about the team and customers, if that is true.
• Ask for a conversation, not a sale.
• Promise confidentiality, and keep that promise.

Lesson B4.5 covers what to say.

Follow up, then let it go

Follow up once or twice over a few months. If the owner says no, thank them and ask whether you may check back in a year. Circumstances change, and owners remember a buyer who was respectful.