Be a dealmaker, not a doer! Part 2: Four key elements of success

In part one of this two-part series, in the last issue, we talked about the differences between being a dealmaker and being a doer, and the light bulb moment – the catalyst for change. In part two, we’re going to talk about the four key elements of success for a dealmaker.

In part one of this two-part series, in the last issue, we talked about the differences between being a dealmaker and being a doer, and the light bulb moment – the catalyst for change. In part two, we’re going to talk about the four key elements of success for a dealmaker.

There are four things that you need to have if you are to be successful as a dealmaker. They are:

  1. Knowledge
  2. Confidence
  3. Deal team
  4. Deal flow

Let’s take a closer look.

1. Knowledge

You need to have really good knowledge about all aspects of business acquisition. In our article on using the deal wheel we talked about identifying areas where you could improve your knowledge, because knowledge is important. If you’re starting to worry that you don’t know enough, here’s the acid test: do you know more about buying a business than the other person knows about selling a business? If you end up sitting opposite someone who has sold a business before, who knows how it works, and you don’t know what you’re doing, you’re going to come a cropper. Boost your knowledge and you’ll fare better.

2. Confidence

The second key element of success is confidence. I think what this newsletter and the other Dealmaker’s Academy resources are going to be giving you is lots of confidence, as they set out the facts and the logic about business-buying strategies. And you need confidence so that you can sit down with the owner of a business and negotiate a deal. Now, confidence will not come overnight; but what you learn from us will help build your confidence up. And as they say, fake it till you make it. If you dress the part and speak with authority, that’ll go a long way. Also, remember the other person is probably as nervous as you are.

3. Deal team

You need a team around you, because this is not a one-person job. I have people who look after due diligence, HR, legal, accountancy, then there are tax specialists, finance brokers … You need all these people.

4. Deal flow

You need to have deal flow. We have loads of resources available to you about deal flow and, starting in the next issue is a three-part series all about ensuring good deal flow.

Putting it all together

These are the key elements of success for a dealmaker, and if you master these four elements, and don’t miss any part of it out, you’re going to have an amazing combination of skills and strengths.

What about the negatives?

Let’s look at and deal with those things that you feel can stop you, and get all the negatives out of the way

·                     No time

·                     No money

·                     No ambition

·                     Coronavirus!

No time

No time is rarely a valid excuse. If you’ve got time to ‘Netflix and chill’, or read for pleasure, or go to the pictures, you’ve got time to find out about business acquisitions and to get the ball rolling. It’s not usually the amount of time we have that’s the issue so much as the way we choose to spend it. You have to make time for this, and if you’re serious about becoming a dealmaker, you will.

As a client once said to me, after he’d made his first acquisition, ‘Ah, I get it now; you don’t have time to do it when you think it takes a long time, because you don’t know what you’re doing. If you do know what you’re doing and you’ve got a strategy and you’ve got a process, then you’ve got the time.’

The Dealmaker’s Academy teaches the strategies and the process – and there are a ton of free resources to help with this too (see page 12) so ‘no time’ is not an excuse.

No money

I would say that 95% of the people I work with through the Dealmaker’s Academy don’t have huge pots of money sitting around to buy a business with. This is where you need to be a little bit creative. There’ll be more about that in the coming issues!

No ambition

Sometimes people don’t know what type of business to buy, and they lack the ambition to get off their backsides, do some research and find out! You don’t need to worry about that – you’ve shown ambition and initiative by picking up and reading this newsletter, and if you want to know more, see page 12 for more resources.

Coronavirus

A lot of people believed you couldn’t buy a business because of the coronavirus pandemic; I ramped up my acquisition strategy! If it wasn’t that, it would be something else – Brexit, the climate emergency, the growth of the economy in China, the threat of terrorist attacks – you name it, you can bet it’s been an excuse for somebody not to buy a business. Don’t let anything like that be an excuse that holds you back!

More good news

You don’t need a large cash reserve, there are deal structures that allow you to buy a business with little or no money down. Also, you don’t need a perfect credit history. People often worry about this, they worry that because they were late with a couple of credit card payments a couple of years ago they won’t be able to buy a business, but it doesn’t make any difference because you’re not going to be using your personal credit history anyway.

You can buy a business bigger than yours – if you already have one business, that doesn’t have to restrict you when it comes to the size of acquisition; you can buy a bigger one. Growing via acquisition gives you more time and money, because two or more small businesses are worth more when they are combined than they are when separate.

Being a dealmaker boils down to a set of skills you can learn. Remember the Deal Wheel: you can learn strategy and how to have great deal flow, and understand value. You can become an effective communicator, learn to build rapport and be able to negotiate and close the deal. You can learn about talking ownership and integrating businesses to optimise value – and you can learn anything else you need to be able to do or have to know about in your sector.

And remember, you can always hire an expert to handle things for you. Mary Parker Follett, the ‘Mother of Modern Management’ considered management to be ‘the art of getting things done through people’. And that’s a big element of being a dealmaker, not a doer.

Take responsibility for hitting your goals, whether through your own efforts or other people’s, and you’ll be unstoppable!

So, there you have it. Will you make time to be a dealmaker or stay put as a doer? The choice is yours!

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