How do you begin your courtship of a not-for-sale company?
Sending a letter is fairly common practice for contacting owners, but it’s not the most effective way to communicate. A letter will not attract the owner’s attention and likely will go into the trash without being read.
There’s a better way to stand out from the sea of buyers and make sure your message is heard: I suggest making a phone call. You might think calling too forward, but it is an excellent way to differentiate you from your competition and to start a positive relationship with the owner.
If you think about it, calling about a possible acquisition is a logical first step. Acquisition – whether it is 100% purchase, minority interest, majority investment, joint venture, or strategic alliance – is asking for a significant commitment from the owner of the company. You will need to establish a relationship before an agreement is reached because no owner is going to sign on the dotted line with a complete stranger! Why not begin establishing trust in your relationship at the starting line?
Calling is more personal than writing a letter; it lets the owner know that behind the deal is a real, live person with a strategy and a vision for the company. Too often the human factor is ignored in mergers and acquisitions. M&A is more relational than you think.
Stand Out From the Crowd
A phone call builds trust with the owner and ensures your message is heard amidst the dozens of letters the owner likely gets that probably go directly into the trash. Don’t let your message go unheard; taking the extra time to call will show the owner you are serious about pursuing an acquisition.
Share Your Vision and Address Concerns Immediately
A live, dynamic conversation is a much better medium for sharing your strategic vision than a static letter, especially when it comes to not-for-sale-acquisitions. Over the phone, you can address questions immediately and gauge the owner’s reaction. Are they concerned about what might happen to their employees in an acquisition? Do they need clarity on your strategic vision? Clear the air immediately in a live conversation before their imaginations run wild with speculation or they become completely turned off from acquisition. Over the phone, you can offer solutions that might put a wary owner more at ease about selling.
You can make sure your strategy is truly heard by the owner, quell any doubts they may have, or answer any questions immediately. You can also use your research to impress them with your knowledge of the company to build legitimacy and prove that you are really interested in their company!
A phone call also gives you valuable insight about the owner and the company’s culture. You may find you have a shared vision and compatible culture. Or, you might see warning signs indicating that this is not a good strategic fit. Either way, you will get valuable information firsthand from a phone call.
Next time you contact an owner of an acquisition prospect, try picking up the phone. Use your call to make sure your message is heard. Stand out from the crowd, actively engage in a dialogue, and share your strategic vision. Who knows, this could be the beginning of a productive relationship that could lead to a deal.
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Successful acquisitions require exemplary financial skills. Learn more with these AMA resources and seminars.