It is true that baby boomers are becoming a bigger factor in selling businesses. Just as there were many post war Sellers in the nineties, there are now a plethora of older generation business owners that must exit sooner or later.
They might be able to close the business but that is not a desirable option. For these older owners, selling to family members is the best way to pass on a business and have it survive.
However, family members are notorious for going their own way in life. They are even more notorious for disappointing their forebears. So all too often the Sellers are confronted with some harsh reality that they must sell the business to a complete stranger. In all probability this is one of the key reasons why there is such a thing as seller remorse.
When I meet Sellers for the first time it is a fascinating experience. In many cases they remind me of someone I know very closely. The person could be my very father. I have sudden charges of empathy and a emotion. I understand what he is going through… I can see it in his demeanor and on his face. I should say in most cases we are talking about a gentleman in his sixties seven these or eighties. And yes I have seen owners nearly 100% blind and/or deaf still running his company at age 88.
In some cases I do not like the person, and it shows… the connection simply isn’t there. Those meetings do not last too long and we go our separate ways very quickly. But in most cases I connect rather readily with the seller, his needs, his fears, and his ultimate goals. I can only do this after years of visiting companies, Sellers and their families. Perhaps I did too much traveling and face to face meetings. Eventually I tapered off and stopped running around the country at great expense and became more efficient. There is really no need to see every company that you run across. But I maintain my advice to anyone starting out, to be sure and visit those first 50 companies.
There are many companies that have Sellers that are extremely difficult, obstinate and disagreeable. This comes with the territory. When you are a CEO of a small company you may well develop a personality that is etched in stone. I know that if I had spent more time with many of the Sellers, I could have and would have positioned myself to take over their companies. However that was not my objective. When you are an investor or part of and investment group you must decide whether you are running solo or whether you will buy the company has an investment.
There is absolutely nothing wrong with jumping in as the protégé and becoming a partner with the seller. Indeed this may be the path of least resistance. Sellers do indeed feel more connected to the ultimate manager of their company than they would to a bunch of investors. So I always make sure to put the personal touch behind my approach and visitations. Beyond that, these opportunities come up all the time and I would highly recommend this route for many solo buyers that feel comfortable in the hands on management role.
