So, you’re in the market for a new biz. Congrats! Plenty of buyers ask Quiet Light what they can do to be a more badass, irresistible buyer. If you want sellers banging down your door to buy their stuff, look no further than Mike Nunez. This modern-day Mr. Rogers doesn’t strongarm his way through business deals. Instead, he takes a collaborative approach based on … kindness? Yup. Learn why the mushy crap matters in business and Mike’s 5 not-so-secret secrets for being a good buyer.
IN THIS POST
Who could forget Mr. Roger’s enchanting smile, soothing voice, and fire-red cardigan? That dude could whip out a smile that would disarm a herd of stampeding gorillas. While you could argue ol’ Freddy was too much of a softie, his kind approach still won out over his loudmouthed haters.
Now, what on Earth does Mr. Rogers have to do with business? As it turns out, a lot. The world has been telling entrepreneurs, “Yeah! Stick it to ‘im! Grab life by the balls! Be the man!” Aggression, dominance, and winning are often the name of the game. But is the business edition of roid rage really the answer?
Sure, you can punch your way to the top. Plenty of bullies have become rich and famous that way. Smash the sale and do what you gotta do to protect numero uno, right? If domineering strategies haven’t worked for you this far, maybe it’s time to change your approach there, Hulk Hogan.
There’s another option that won’t bruise your ego or give you a heart attack at age 40: being a good, considerate, kind, and collaborative buyer. (Did you just throw up in your mouth a little? Good! That means we’ve got work to do.)
Of course, “good buyer” could mean anything. It sounds pretty subjective, right? Well, we’re drawing the line in the sand to say what you need to do when you want to buy an online business. You need to follow 5 tenets of good buyer-dom to ditch the devil horns and become an angel of eCommerce business.
Quiet Light interviewed the kungfu master of business negotiations, Mike Nunez, to get his tips on how to be a kickass buyer that sellers beg to work with.
Mike Nunez got his start in online marketing pre-Y2K, starting his career while he was still in college. It was his dream to work from anywhere, and he was able to make every day pajama day with a career in online marketing, even though it was early days for the industry. From there, he got into affiliate marketing for travel, eventually launching his own business with his brother. “It’s been a really fun journey,” Mike says.
As a former Googler, Mike wanted to put his marketing and search engine expertise to work. That’s when he got into the acquisition game. He bought two businesses through Quiet Light:
- An outdoor equipment seller.
- A custom suit company (that’s fancy as hell, am I right?).
Life’s changed a lot for Mike over the past 21 years. “My dream used to be that I wanted to work from anywhere. My new dream is that I want to not have to work,” he laughs. But Mike’s business success isn’t what makes him so darn special: it’s his negotiation strategy.
In the two deals he’s done with Quiet Light, business sellers clamored for Mike’s offer. Sellers loved Mike so much that they were willing to take a smaller offer just to hand their business over to the guy. He’s the real Mr. Rogers of business transactions. Hell, if he didn’t have a custom suit business, I’m sure he’d sport a cardigan just to play the role.
Sweaters aside, Mike’s mastered the art of being a good buyer. That means having a handle on the business aspect of the transaction (earnings, ROI, etc.) as well as good people skills. It’s the latter part of the equation that so many entrepreneurs eff up, losing the business seller in the process.
Don’t do that to yourself. Get in touch with your softer side, a la Mr. Rogers, to be a Good Neighbor.
Mike is successful in business negotiations because he knows what it means to be a good buyer. That means:
- Choosing the right business
- Giving sellers what they want
- Letting people be on your side
- Preparing for every call
- Showing off your blueprint
We’ll look at what this means in a bit, but it’s important to remember that a business sale isn’t a logical transaction. You might be mired with P&Ls, SDE, and other bland acronyms right now, but at its core, a business sale is a really emotional thing.
I’m not saying you have to gush about your feelings and braid each other’s hair, but when you sit down to chat with a business seller about buying their business, you need to master certain soft skills. After all, you can toss as much money as you want as someone, but if they don’t like you, they won’t accept your offer.
In other words, roid rage tactics don’t work in the real world. The hard-hitting businesspeople we see in pop culture wouldn’t be successful in a real-world setting. Business sellers would slam the door in their face. Although these tactics can work at times, they won’t go as far as kindness. “You have to be careful when you ask questions. It’s a fine line between a question and an insult,” Mike says.
But even then, we’re living in a “Big guys get ahead” and “Nice guys finish last” world. That’s bad advice when you’re talking about a business transaction. You have to be a little mushy to make it when you buy an online business.
So why do we care about being a good buyer? It boils down to 3 things.
1. Get A Better Business Deal Structure
Nice guys don’t finish last when it comes to stacking Benjamins. When you don your best Mr. Rogers persona, you can persuade a seller to choose your bid—even if it’s not the highest offer.
This happened in both of Mike’s transactions. Each time, there was an offer with more money on the table. But did the sellers bite? Nope. They specifically said, “I don’t care about those other yahoos. I just want to work with Mike.”
Business sellers want to work with good buyers, and they’ll sacrifice a few extra bucks to work with someone who knows their stuff. “There were multiple offers. In both cases, I didn’t have the highest offer,” Mike adds. Remember, this business is the seller’s baby. It’s an emotional time for sellers and they want to know the company will survive a sale. They’ll gladly take a lower price tag if it means passing the torch to someone who won’t sink the ship.
2. Find More Opportunities
Business sellers will say the damndest things if you’re nice to them. That’s why Mike recommends disarming your seller at the beginning of every call. Instead of coming out of the gates, ready to knock down the price tag and tell the seller their baby is ugly, follow the principles of being a good buyer. Collaborate and work together with the seller.
If Mr. Rogers wouldn’t say it, you shouldn’t say it to a business seller. Imitate how he treats people with dignity, listens, and gives significance to someone else’s experiences. Meet the seller halfway, taking a collaborative approach instead of treating every phone call like an interrogation. If you tell them you’re looking for opportunities to grow the business and ask for their help, they’re more than happy to oblige. It’s all about treating the seller as a human, and not a cash cow.
This worked out great for our boy Mike. He would tell the sellers, “I’m looking for opportunity. I want to make this happen. Help me get there.” His sellers were more than happy to point out new avenues to grow the business. In fact, they would bring up several opportunities that weren’t listed in the marketing package. That’s free advice from the business owner, Jack. It’s worth its weight in gold.
3. Build A More Profitable Business
The endgame here is that you want to make more money, right? That’s the overall purpose of buying a business; to make it profitable. Jerks don’t prosper in this situation. If you’re too aggressive when you talk to a business seller, it’s going to turn them off completely or cause them to put their guard up. You’re never going to get a good relationship (and the juicy tidbits of information that come with it) that way.
But when you’re a good buyer, you can put in the relationship capital that makes for a badass, profitable business. You’ll be amazed at how many doors open to you when you make a concerted effort not to be a dick. “It’s amazing how they almost fall over themselves telling you about all the opportunities in the business,” Mike says. Sellers want to pass the torch on to someone who cares. When you play ball and become a good buyer, you’ll not only snag the deal, but walk away with a handful of money-making opportunities with it.
Mr. Rogers once said, “I hope you’re proud of yourself for the times you’ve said ‘yes’ when all it meant was extra work for you and was seemingly helpful only to somebody else.” It’s a long-winded way of saying you shouldn’t be a good human being for your own sake, but that it’s the right thing to do.
Which it is. But good behavior also behooves you when you buy an online business, especially if you’re at a slight disadvantage on pricing. Mike was kind enough to share his 5 tips that go against traditional roid rage negotiation techniques and get to the heart of what it means to be a badass buyer.
1. Choose The Right Business
Before you go cozying up to your neighbors, make sure you’re in the right neighborhood. That is, make sure this business is actually a good fit for you. You probably have a good idea already after reading over the marketing package, but keep this in mind while you’re chatting with the business seller, too.
For Mike, it boils down to two things:
- There’s growth and revenue potential: This is business, after all. Make sure the biz has promise, and bid accordingly. But don’t over- or under-bid. You want to be in range of the seller’s magic number for any of Mike’s negotiation tricks to work. “Money is valuable. If you’re nowhere near their magic number, the conversation ends,” Mike says. After all, if you’re offering $1 for their business, they’re not going to hear you out, no matter how nice you are.
- The business owner gives a damn: You don’t want to buy from someone whose heart isn’t in the business. The best buyers buy from people who care about their business. “The two owners I purchased from are still very much vested to this day,” Mike says. When the owner cares, they’ll do everything in their power to smooth out the transition. That helps you skip over the BS and land comfortably in Profitville, baby.
2. Give Them What They Want
Everybody wants something. As a good buyer, it’s your job to play detective, read between the lines, and listen to your buyer during the initial call. And no, don’t focus on multiples or dollar signs here. Outside of the money, what does the buyer care about? If you’re thinking, “They don’t care about anything aside from money,” you aren’t listening hard enough or you’re asking the wrong questions.
It’s your job to identify what the seller needs besides dollar signs. For example, when Mike bought his custom suit business, the business seller was very concerned about his employees. He cared about these people and needed to know that Mike would take care of them. Mike didn’t say he wouldn’t fire anyone, but that he would evaluate everyone fairly based on performance (and ended up keeping everyone because the employees were that damn good). This was a huge relief to the seller, who chose to go with Mike over higher-paying buyers who couldn’t promise the same thing.
The best, not-so-secret negotiation technique in business is a simple one: find out what your seller wants and give it to them. “How do I figure out what the seller wants?” you might wonder. Aside from listening very closely in the initial call, Mike recommends looking in a few other places:
- The broker: These folks do a lot of legwork for you. You’ll be able to get a lot of answers with a few emails.
- The marketing package: Did the business seller say anything about the business in their marketing materials that you can leverage? For example, one of Mike’s sellers was very proud to operate in Europe; it was a sense of pride and patriotism. Mike tapped into that by assuring the buyer he would keep operations in Europe.
- The seller interview: If you have access to a seller interview, watch it. It’ll often tip you off on what the seller needs.
“The purpose of the initial call is to identify value beyond the dollars,” Mike says. If you find what the seller needs and you can’t give it to them, this isn’t the deal for you. If you want to fire everyone and start fresh, or take operations over to China, these business deals wouldn’t have been for you. And that’s okay! You’ve got to be in the right neighborhood before you start rubbing elbows with sellers.
3. Let People Be On Your Side
Remember how you chose a biz with a seller who cares … a lot? When a seller cares, they’re going to offer tons of suggestions. Now, some of those suggestions might sound like the stupidest ideas on Earth. But you have to remember that the business seller is on your side; even if the idea isn’t a great one, they’re contributing because they want you to do well. They aren’t out to harm the biz: they want it to grow, too. “We welcomed their feedback 100%,” Mike adds.
The third component of being a good buyer is to let people be on your side. Don’t flat-out reject your sellers’ suggestions. Always leave the door open for feedback. You don’t want to miss out on a stellar idea (that will make you tons of money) because you’re being a close-minded jerk.
Check your ego at the door. Now isn’t the time to puff out your chest. In fact, the sellers’ advice is usually spot on. I mean, these folks have spent years running this business. They probably know a thing or two that you don’t understand yet.
When in doubt, let the numbers speak for themselves. If you aren’t sure if your idea or the seller’s idea is the way to go, peek at your data. As Mike says, “You aren’t entitled to a point you can’t justify.”
Does the data support one direction over another? Look at this objectively. “Feeling strongly isn’t good enough. I need to go pull data, look at the numbers, and ask why we’re doing something one way,” Mike says. Even if you do reject a seller’s suggestions, at least now you have data to back up your reasoning instead of giving them a flat-out, “No,” based on not wanting to share your toys.
4. Prepare For Every Call
Do. Not. Wing. It. On. Seller. Calls. Even Mr. Rogers had a script, for Pete’s sake. No matter how good you are, you’re not that good. You need to prepare in advance of every call with your business seller if you want them to take you seriously as a buyer.
This breaks down to a few things that should be common sense (but sadly aren’t):
- Focus! Take the call in a quiet place, not as you’re hailing a cab or boarding a flight. You need to be in a place that’s quiet so you can focus.
- Do the research: Heaven help you if you get on a call and say, “What business is this for, again?” That would be a mondo-stupid question that will enrage your seller. Read the marketing material, watch interviews, look at the website, etc.
- Show you did your homework: You did the research, so prove it. Ask intelligent questions about the business. Make sure the seller knows you’re there to find opportunities, and not to critique their business with your questions. Walk a fine line so you don’t insult the buyer. If you do, you might as well be pouring bleach on your neighbor’s award-winning rose garden. Thoughtful questions show business sellers you give a damn, and it makes a good impression.
“But I don’t have tiiiiiime,” you might think. I feel ya there, pal, I really do. But nobody has the time these days. Sellers don’t have time to sit there and answer bad questions as you rustle around in your car. This is one situation where you’ve got to make the time if you want to be a good buyer. If you’re unprepared or uninterested, sellers will not work with you. Period. Even if you have all the money in the world, these people care about their biz and won’t want to sell it to you.
Put a reminder on your calendar, go to bed an hour later, hire a VA—do what you gotta do to free up time for these calls.
5. Show Them Your Blueprint
Good buyers don’t just plan for the call itself. To be a great buyer, you need to have a rough idea of where you’re going to take the business, should the seller accept your offer. This business is their baby, and they need to know that you aren’t going to destroy it in 6 months.
Have a plan that shows you know what the hell you’re doing. Make a rough roadmap of how you think you could bring value to the business and grow it. It could be as simple as, “I see you’re only selling on Amazon right now. I think we should start selling via an eCommerce business website as well.” And include a few steps to get to that goal.
You don’t need to show up with a fleshed-out business plan or anything. Just have an idea of what you bring to the table for this biz based on what you already know about it. “Sellers have to be comfortable that the new owner is going to do right by what they built,” Mike says.
Don’t be afraid to adjust your plan as you chat with the business seller and get more deets. Heck, you might need to even adjust your offer based on how the plan shakes out. Do you need to pay more or less for the business? Is it still worth your investment?
Good business is about being someone people want to work with. Roid rage is fun to watch and all, but it’s just not sustainable if you want to be a great entrepreneur. When in doubt, channel Mike’s Mr. Rogers vibes to potentially pay less when you buy an online business, find more hidden opportunities in the business listing, and earn more profits for your hard work.
Although being “good” is subjective, Mike gets perks for good behavior by choosing the right business, giving business sellers what they want, allowing people to be on his side, preparing for every call, and sharing his vision for the business with the seller. The buying process can take a lot of time and frustration. Streamline all the BS and maybe make friends along the way by following these 5 cardinal rules to be a good buyer.
Ready to be a better buyer? Slip on your red cardigan to save money, buy a bangin’ business, and forge strong seller relationships.
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