A number of my clients run through a lot of deals before finding the ones that interest them. This can be discouraging but my adivce to people who run through a lot of deals is: you are learning a ton, don’t stop!
Every deal you visit, every broker you meet is a learning experience and just adds to your knowledge of industry, deal structuring and people skills. Never let up. You bring that experience level to each new meeting you attend and you become that much more impressive to the people you meet. The deal business has multiple advantages, not the least of which is when you buy a company you are no longer an employee of any sort but a CEO… instantly. This is like becoming an Eagle Scout (I am a Scoutmaster), the title travels with you and helps you wherever you go. Anyway that is only half of what I wanted to share. The many deals that you visit can have a become a huge benefit down the road. I save all my LOI offers for as long as my computer is alive and kicking. Or even if I have to change computers. They accumulate rapidly and I even
learn from writing all those documents. The offers are only two short pages and they can be replicated with each offer structure being identical to the last. However, that is a subject for another post. But what is interesting is that over a period of months or years there are many Old deals in my computer that never went anywhere. That is the nature of the business. But I am often curious.
Whatever happened to those deals? Were they sold? Are they still on the market. Gosh the seller was asking too much and the broker was cocky I will laugh if it is still sitting there. Indeed it generally is just sitting there. I periodically go back and check on many of my old prospects, particularly the ones I found compelling but maybe the deal was out of reach. I call the broker, he usually remembers me and I ask about the deal. Sure enough the odds are the deal is still on the market, or if not, was never
sold and the broker doesn’t even represent them. This phenomenon often presents new opportunities out of old ones and I can say I have completed at least a couple of deals in the past from revisiting old deals. There is a huge benefit from doing this exercise. Deals that sit around for months or years often have exasperated sellers who become more motivated to sell over time. This can reduce the price and make the terms more attractive as the seller becomes more realistic. Benefits all around. This is why the first question I ask a broker is: How long has the deal been on the market?