Things Dealmakers Do – and Don’t Do

Dealmakers can operate in different sectors, buy businesses in different ways and use alternative methods of funding. However, when it comes to successful dealmakers, there are some things they have in common despite other differences in their approach. We take a look at some of those things in this article.

Dealmakers can operate in different sectors, buy businesses in different ways and use alternative methods of funding. However, when it comes to successful dealmakers, there are some things they have in common despite other differences in their approach. We take a look at some of those things in this article.

In the first two issues of the newsletter we looked at being a dealmaker not a doer. Here, we’re going to break it down a little further.

Being a dealmaker means having a clear goal and always taking steps towards achieving that goal. It also means avoiding the missteps that move you and your goal further apart.

Here are some things that the most successful dealmakers do – and don’t do.

Things successful dealmakers do

There are three areas successful dealmakers focus their attention on that help them achieve their goals. They focus on deal flow and on getting people to contact them. They create a plan and stick to it. And they start thinking about their exit early.

What most business owners do is the exact opposite of that. For example, they don’t think about the exit until the business is starting to go down. However, the time to think about the exit is when the business is going up. You want to capitalise on that upward trajectory.

How to achieve your goals faster

There are certain habits you can get into and actions you can take that will help you get to your goals faster.

Write your goals down each day and constantly refine them

I firmly believe that you will achieve your goals faster if you write them down every single day and constantly refine them. I’ve got a book, a notepad, that I write my goals down in. You can do the same, use an app on your phone or keep a record on your laptop – whatever works for you.

Sometimes, from day to day my goals don’t really change but then, maybe after a weekend, I might look at the list and think, you know what? That is not quite what I’m looking for now; this is more like it, and I start to refine them again.

We’ll talk about chopping and changing plans shortly and I want to be clear, this is different from that. With this you are refining your vision, you are keeping your goals aligned with who you are and where you are. Many years ago now one of my goals was to own a fax machine (no, really!). Should I still be aspiring to that level of goal? Obviously not! I have changed, my circumstances have changed, my goals reflect that.

The goal list you start out with is not necessarily the goal list you’ll be working towards after a couple of years. Don’t be afraid to change it as your circumstances, mindset and ambitions change. It’s only by refining your list that you achieve and maintain clarity on your goals.

Keep clear and focused on what you want to achieve

Don’t let yourself get distracted by someone else saying, ‘Why should you be doing this?’ or, ‘Why shouldn’t you be doing that?’

I’ll give you a little piece of insider information here: in the past, every time I talked to certain people on their business-buying journey, I found they’d got a different plan. And the reason they were not moving forward was because they kept changing their goal.

It’s like having a map of the UK and saying, ‘I’m in London and I want to get to Manchester,’ but constantly changing the route, then saying, ‘Actually, it’s not Manchester I’m going to, it’s Leeds,’ and changing again, then saying, ‘In fact, it’s not Leeds I’m going to, it’s Birmingham.’ You’d be all over the place, you’d be wasting time and incurring costs, but you’d never get anywhere.

To get to where you are going you’ve got get clear on the destination and stick to the route. Yes, if you hit a road block you might make a small detour – but then you get right back on track.

Do something every day to move you towards your goal

Every day you should do something to move you a step closer towards your goal.

Start the day by saying, ‘What am I going to do to move me towards my goal?’

If you are unsure about whether you should do something, ask yourself: ‘Is this moving me towards or away from my goal?’ Then do it or don’t do it.

At the end of the day, say, ‘What did I do to move me towards my goal?’

This single-minded focus will help you be successful faster than those people who have a different plan every day about a different thing, and don’t know where they’re going, don’t know what they’re buying, don’t know whether it’s three businesses or ten businesses. They hear me do dozens and dozens, they want to do dozens and dozens, then they hear someone else who just does one big acquisition and now they want to do just one big acquisition.

No. Start with your goals, make a plan that will allow you to achieve those goals, and do something every day that moves you towards them. One day that thing will be to exit the business; don’t miss that opportunity. Don’t wait for the business to lose its upward momentum and start to fall before you take the money off the table and use it to achieve your life goals.

Get off the organisation chart for the business

A big element of being able to take that bird’s-eye view and think and act strategically is not being involved in the day-to-day running of the business.

If you own a business right now, the chances are pretty high that you sit at the top of the organisation chart and people report in to you. If it’s a one-person business then you are the organisation chart. If I said get a piece of paper and lay out the organisation chart for your business you might just write your own name in the middle of that piece of paper – and that’s a pretty lonely place to be. I also think that you’re putting yourself in a very vulnerable position, because if you are on, or in a worst-case scenario you are, the organisation chart, you will never sell a business for its maximum value.

The reason most people who are on an organisation chart of one don’t have company is that they don’t want to employ people, they think it’s hassle.

Now, I have several hundred people working for me. Having several hundred people sitting beneath you on the organisation chart, reporting in to you, probably sounds like an absolute nightmare, but it doesn’t have to be and it’s not for me. You see, I’ve got a freelance HR person who looks after all the issues. And there are always issues … but I don’t personally have to deal with them.

I’ll be honest, I don’t even know those people’s names. I don’t mean that in a cavalier way. What I mean is that if I started to have a personal relationship with hundreds of people it would drive me round the bend. They’d all be texting me and phoning me and emailing me and I wouldn’t be able to do what I do.

And nor will you, so you need to get off the organisation chart!

Acquiring staff

When you buy a business and acquire staff, you need to show them a very clear organisation chart otherwise you will get dragged into the running of the business, one decision at a time.

If you get too involved at the start it will be harder to pull back later, because if they feel that you’re the go-to person for everything you are always going to be the recipient of the messages and emails about absolutely everything.

On the other hand, if you are a bit more standoffish, they’ll think you don’t care.

It’s not easy, any of this. It’s walking that very fine line between, I care about you, but I’m only going to see you once a month. It’s managing those expectations around how visible you’re going to be. You need to show them a very clear organisation chart of who to go to with each problem, so they know that they go to this person with an HR problem, that person with a marketing problem, rather than everything coming to you.

Quite simply, you just do not want to be on that organisation chart. If you feel as though you must be on there, specify clearly when staff should come to you. You might say, ‘Come to me if the building is on fire; for everything else, you go to these people.’

You don’t want a day-to-day job

I think this is a philosophy rather than a strategy, but it is certainly a strategy in terms of the fact you will increase the value of your business if you do remove yourself from the organisation chart. A business that runs without you is of more value to a potential buyer than one that relies heavily on you being involved.

Buying a business is not about creating a job for yourself. If your current business is really a well-paid, or maybe even a not so well-paid, job, you can use an acquisition to remove yourself from the day-to-day running. If your business is stuck in a rut, buying another business and bolting it onto your existing business is a brilliant way to revitalise it.

You can revitalise it with a fresh approach, fresh products, fresh services, a fresh team, a fresh focus on the future. If you’re bored with your current business, then buying another business is a great way to bring the thrill and excitement back.

Take that strategic, bird’s-eye view

However, you’ve got to be working on the business rather than in the business. I recommend you read Michael Gerber’s The E-Myth, which I read thirty years ago when it first came out. If you haven’t read it, I can summarise it in a sentence: work on the business rather than in the business, and systemise everything. When you start to work on the business, you will find that all the stresses of working in the business disappear and you’ll find yourself with a business that is worth so much more money.

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