A Tale of Two Sellers. 🧵

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II spent too much of my life frustrated and embarrassed that my skill set didn't seem to neatly fit in. I believe that we have the power of self authorship, and that a great player creates a new game that favors their strengths and avoids their weaknesses. That’s what I’m doing. That’s what I invite you to do. If Small /Medium business acquisition is new to you, cool. Welcome. If you're terrified of numbers and spreadsheets, pull up a chair. If the schmatta business is not your jam but you want to hang out with people who are looking to build- you're among friends. Join me as I deploy 15 years experience in fashion and marketing to acquire and grow businesses in the space. 🧵

In my 23-year marathon of a marriage, I've picked up a few tricks that surprisingly come in handy in my business pursuits. And I’m not saying I always do these- but I aspire to. Take active listening, for instance. It's not just a couples therapy buzzword; it's a potent tool for uncovering motivation. Unlike assuming, jumping to conclusions, or nitpicking, active listening is about deeply understanding what's being said. And what’s not being said.

The magic of active listening lies in removing emotion and seeing things from your counterpart’s point of view. It’s not a passive nod-and-smile; it’s putting in the effort of connection and comprehension. And though I don’t always love to admit this to my husband, this is a win-win, in business as in marriage and a game-changer in forging solid and lasting business connections. In ‘Wild Company, The untold story of Banana Republic,’ there’s this gem of a scene where Don Fisher, the Gap founder, takes Mel and Patricia Ziegler out for dinner to talk shop about selling their company:

👂🏻 👂🏻👂🏻👂🏻👂🏻👂🏻

Being all ears is like having a superpower in those early chats or meetings with potential sellers, and especially during due diligence. But even before that, there’s a goldmine of info tucked between the lines of broker pitches, listings, or even a seller’s LinkedIn post before they admit they’re open for business. For me, I’m trying to be all the ears, all the time.

The work of deal searching, happens in conversations. I’m nursing two deals at the moment in my Self-Funded Search. (Not sure what that is? Here’s some more info.)

They both spawn multiple calls a day. I get info from the seller, through the broker, and relay it to the lender, and check in with the analyst which triggers a question for the lawyer, run this by the investor and back again. But the calls with the sellers are where I really try to deploy active listening to get to the heart of what they want, and the art of being quiet to draw out what they might not have meant to share. Holding on to silence and not rushing to fill it is kind of like going out drinking together, but filling your vodka with water. Rule of thumb: don't be the next person to speak after you ask a question. This has worked really well for me in one deal, and kind of backfired in the other;

DEAL 1. We’ll call it, The Linen Project.

This is a 50 year old, family run business. The seller is unfortunately very sick. I’ve been pursuing it for three months now. This time has taken us from seeing a listing on an online platform, getting through NDA, CIM, Initial financials, Lender structure and some Q+A with the broker. However, While trying to put together an offer letter, there have been gaping weeks of silence and inertia due to the seller being incapacitated.

⌛ It is often said that time kills deals, and not wanting this one to be still-born, I grabbed coffee with the broker about a month ago, to get to know each other a bit while waiting for the seller to be up for taking a call. Over cappuccinos in Philadelphia, he tipped me off that the seller is a huge Trump supporter, and very much wants the business to continue to be run by a family. Aha! Active listening activated!

Sweet reader, off I trotted to Amazon to buy a MAGA hat and T-shirt to wear to the Zoom call, Proudly displayed the family business logo on my Zoom Background and polished my speech about my five children. But man plans and God laughs, the seller was unable to log on to zoom, (it being invented after 1980) so we ended up yelling in to the phone and pledging our allegiance to Trump, America, Linens, whatever it would take. The seller spoke a lot. But he didn’t say much. I was hearing confusing, conflicting statements. I think he wanted a platform to talk about what he’s built, but between the bad line and his illness, it was hard to sniff out much. Trying to tune in to the motivation behind the noise was filled with static. And our declarations of family values fell on deaf ears. In this case, I got the sense that had I been a man and a bit closer to the seller’s age, we could have a beer together and get him comfortable. But there was a lot to overcome. This one will have to go through the broker if it has a chance.

 DEAL 2. We’ll call it, The Boomer Project.

A 45 year old, family-run business. All in ship shape. Sales are pretty flat but I see potential to be bigger. I love that this brand caters to boomers, while also being aware that targeting an aging demographic (all demographics are aging) will mean needing to reinvent the branding to stay fresh. With this seller, conversations are more direct and easy. They’re transparent on their goals, their fears and the outcome they need. I drove four hours each way to meet with the seller and see the facility. She shared about her family. What the business was, how its woven into the family relationships. The employees and what they mean to her.

Reading between the lines I was hearing “I’m not in a rush. I want to feel good about this transaction and like I honored my families’ legacy. I also need to know my people will be taken care of.” This gave me the idea of some creative deal structure. Maybe this seller would be game to do a larger Seller note? An Earn-out? She didn’t balk. We’re still fine tuning this, but seeing her on her turf and making room for her to really talk opened the door to some deal acrobatics that might get this one over the finish line.

Warren Buffett likes to say great deals come together with a minimum of effort. Things are basically aligned ahead of any negotiations. In these deals, that feels true. But when its not coming together ahead of time, silence is a powerful tool. If left hanging, it will spur people to over-share, ramble, fill the void. And sometimes that’s where little tidbits come out for the active listeners to gobble up. Clink. Clunk.

^{_{Ending with optimistic news from Forbes: “There are more self-made female billionaires this year than ever before- and nearly four times the number there were a decade ago.”}}

FREE TOOLS TO GET YOU STARTED:

 📍Where can I find deals? TEN PLACES TO START DEAL ORIGINATION

💼 Start with you. Always be selling. HERE are five actions to make sellers, investors and brokers swipe right on you.

📚 What I’m reading/doing/eating/buying

• I'm reading: This Piece from NYT

• Listening: This Marketplace interview

•  Where I’m hanging out: Not at THIS event though I wish I could make it, and hope someone else can. New York Search Fund & SMB Community Happy Hour Please yell if you’re going to be there too!