If you’ve been reading along in this 30 Days to ETA series, you know that in the Day #15 post I discussed how to achieve The ETA Business Team. I’ve said it before and I’ll say it again, people are the most important ingredient in your journey to Entrepreneurship Through Acquisition (You can read the previous post by CLICKING HERE). So, even though so far in this series we’ve spent a lot of time talking about strategic initiatives within the business, it’s time we pull up to explore ways in which you can find that business. In today’s 30 Days to ETA post, we’re going to explore how we can create a system where business owners, and those that have a business for sale — Brokers, Attorneys, CPAs, Bankers, etc. — can find you to present the business… Enjoy!
ETA Deal Flow
A few years ago, I helped a client acquire a business. Let’s call this Entrepreneur Through Acquisition Jason. Together, Acquisition Entrepreneur Jason and I created systems, goals, and vision statements. As a part of my consulting, Jason packed his ETA Team bench. An an ETA Team, they wrote and implemented their business plan and detailed marketing plan. Well, guess what? It worked, and it worked well. A key component to their future growth involved Mergers & Acquisitions — An advanced plan, but one where growth can be achieved quickly through mergers or acquisitions than through normal channels to grow the business.
Soon, though, Jason and his team became too busy — What seemed like a good problem to have! Although they revised systems and team roles, and against my counsel, Jason demanded that we stop all Mergers & Acquisitions activity. I remember him saying, “Sam, we’re just too busy with the business that we have. Any Mergers & Acquisitions activity we pursue will be a waste of time and money.” He opted to discontinue all ETA Deal Flow.
Fast forward just two years later, when company sales slowed down. While their business started off well, Jason and the ETA Team was now beating their collective heads against the proverbial wall. Their revenue was stagnant. Every time we met, I’d remind him to begin ETA Deal Flow again… restart it and increase it — It will be worth the spend in time and money. Yet, time and time again Jason refused.
The company ultimately slowed down to where business had become financially painful for Jason and the ETA Team. When we met at this pain point, Jason agreed to restart their ETA Deal Flow. As my physical trainer used to tell me, “No change will happen until the pain associated with staying the same is greater than the pain associated with changing.” The same methodology unfortunately was the same for Jason.
The Mergers & Acquisitions process isn’t complete until all Purchase Agreements are signed, money is exchanged, and you takeover the business. Until then, keep your ETA Deal Flow running!Sam Palazzolo, Managing Director @ Tip of the Spear Ventures
ETA Deal Flow Marketing Overview
ETA Deal Flow is not a new concept to business owners. Simply put, ETA Deal Flow is showing your potential business sellers and their ETA Professional Team who you want to be, not who you are today. You want your potential sellers to think about you first when they think about selling their business. To show off your Entrepreneurship Through Acquisition skillset you need to do three different things:
- Brand Your ETA Deal Flow – Create a logo or visual imagery to identify your ETA company
- Advertise – Use media to get that visual image to the potential buyer
- Relate to the Public – Get public relations media sources to tell your business acquisition story in a favorable light
ETA Deal Flow Target Market
If you’re like most Acquisition Entrepreneurs, you’re short on time. You may not think you have time to market much less develop an ETA Deal Flow campaign system. Well, that’s the furthest thing from the truth. Every person in the Mergers & Acquisitions markets whether you have a marketing campaign plan in place or not.
So, wouldn’t it be best to create a plan so that you market your search in a similar manner? If you want to show off your culture of kindness, make sure all employees are kind. That’s marketing. Or, hire an agency or a team to create a uniform ETA Deal Flow campaign plan that shows the community how kind you are. However you chose to market, remember that all are a part of your marketing presentation — You are not an Acquisition Entrepreneur in and of yourself.
When Should We Market ETA Deal Flow?
By default then, if everyone is helping with ETA Deal Flow, then we’re searching for businesses to merge or acquire all the time. However, we Acquisition Entrepreneurs should develop formal ETA Deal Flow strategies from day one. We should also refine/modify as we receive input from the market. What we shouldn’t do is stop like Jason! We shouldn’t stop ETA Deal Flow until we have a signed Purchase Agreement contract from a business acquisition. This may cause you to conduct ETA Deal Flow twice as much when times are bad.
Where Should We Market ETA Deal Flow?
It’s easy to see that everyone on your ETA Team markets all the time, but who do we market to? Where do we market? I could easily say that it depends on your national, state, or local location. I could also say that it depends on the type of industry your target business resides in. At its simplest, what works for one ETA may not work for another, even within the same industry or geographic location.
How Much Money Should We Devote to ETA Deal Flow?
Once you’ve established an ETA Deal Flow system, you’ll need to allocate funds to it. If you have a couple million dollars in the bank or can afford to market like Coca Cola, more power to you. Most of us don’t have that luxury when looking at the small business market. Entrepreneurs Through Acquisition often feel like ETA Deal Flow is a waste of time and money because we don’t see immediate results.
I often tell the Entrepreneurs in Residence at Tip of the Spear Ventures that marketing in general is successful only 10% of the time. If we knew what 90% of ETA Deal Flow marketing was going to be wasted, of course we wouldn’t spend time/money on it — But we don’t know!
ETA Deal Flow is a Business Investment
What Entrepreneurs Through Acquisition are actually dealing with in searching for a business, then, is an investment NOT an expense. Even though the quantifiable costs for ETA Deal Flow will not show up on any Profit and Loss Statement as an expense, we’re actually dealing with an investment and the initiative should be considered as such.
Making, implementing, and continuing an ETA Deal Flow campaign is comparable to the laws of sowing and reaping:
- We reap what we sow
- Reaping happens after sowing
- We reap more than we sow
So if we conduct consistent ETA Deal Flow activities, we’re going to sow good seeds, if you will. Those good seeds should become viable leads to businesses for sale. When business owners ultimately decide to sell, we will be in position to reap our ETA Deal Flow rewards. And that’s WHY having an ETA Deal Flow campaign system is important.
Everything we’ve been talking about in this 30 Days to ETA series now ties together. This post finalizes how to search for a business to buy via ETA Deal Flow.