FREE TRAINING: 3 Keys to Sell Your Business with Confidence

Beware the Guy With a Shotgun

I get calls, emails and letters all the time from people telling me they want to buy my company, or that they represent someone who wants to buy my company. How can I know who’s for real or not? I’d like to sell my company, but I also have to keep running it and I can’t afford to waste time on somebody’s wild goose chase.”

Felix (not his real name) heard me speak at a recent conference and came up to me afterwards. Visibly frustrated, he told he recently had two meetings with potential buyers who just ended up being brokers trying to get an engagement to sell his company. “If they misrepresent who they are when coming to see me, you can be assured I have no intention of hiring them to sell my company,” he said emphatically.

I explained to Felix why he was getting so many calls, emails and letters. He has a manufacturing company in the Nashville area with annual revenue greater than $10 million. All private equity firms, and most business brokerage firms and M&A investment bankers, buy the same lists of privately-owned companies. This means Felix’s company is on a target list of about 8,000 different firms that are interested in private company acquisition. Now, this doesn’t mean Felix’s business is right for any of those 8,000 investors and advisors. He is just the recipient of their shotgun approach to marketing. Meaning, they throw tons of stuff out and hope they hit something. If Felix gets 6 to 8 calls and emails a week, that means thousands of other privately-owned companies are also getting 6 to 8 calls or emails a week.

Felix seemed a bit disappointed by this explanation. I think he actually liked having potential buyers show interest in him. However, I explained that the attention he was getting was due to the fact that he’s just a name on a list, not a real target of interest. At that point, he realized he needed to be very careful about not wasting time to respond to these ostensible expressions of interest. “So, you are telling me I shouldn’t be comforted that there are tons of potential buyers that want me. Fair enough, but when I am ready to sell, how do I find the right buyer?

Though it sounded self-serving, I had to tell Felix the truth. “That’s the value of having an intermediary you know and trust,” I told him. “The ‘I have a buyer’ letters and emails are nothing more than spam,” I continued.  “You want a buyer who comes at you with a rifle, not a shotgun. A smart intermediary can do the work to distinguish who’s for real and who isn’t.”

Hunting with a shotgun makes sense for certain kind of targets, but not when looking for a great business. A business owner should not fall victim to the “I am interested in your company” regular spam. The right buyer, a real buyer, will come at you with a different approach. You’ll know it when you see it, and it’s highly likely they won’t be carrying a shotgun.


JIM CUMBEE is President of Tennessee Valley Group, Inc. a retainer-based business brokerage and transition mediation firm in Franklin, TN. Cumbee is an attorney and has an MBA from Harvard Business School. Jim is the author of Home Run, A Pro’s Guide to Selling a Business. .  He has a wide range of corporate and entrepreneurial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee. The principles above are true, but the story, names and fact patterns are changed to preserve the parties’ identities.

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Tennessee Valley Group

Jim is an attorney (non-resident status with the Missouri Bar) and though he no longer practices law, he has read and negotiated enough legal documents to fill a cargo tanker. He has an MBA from Harvard Business School and knows how Wall Street and private equity operates. Jim is a Tennessee Supreme Court Rule 31 listed general civil mediator with tons of experience helping business owners (large and small) work through sensitive problems to achieve winning results. He is the author of "Home Run, A Pro's Guide to Selling Your Business, Seven Principles to Make Your Company Irresistible."

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