8 Ways to Sweeten 8 Ways to Sweeten Your bid to buy a Your bid to buy a business without business without paying morepaying more

Sunbelt Business BrokersSunbelt Business Brokers

The ObjectiveThe Objective

Tip the scales in Tip the scales in your favor over your favor over other buyersother buyers

Keep the deal Keep the deal affordableaffordable

Increase the Increase the seller’s confidence seller’s confidence in youin you

Get the seller to Get the seller to accept accept youryour offer offer

1: Shift more of total price 1: Shift more of total price to cash up frontto cash up front Cash is KingCash is King Single best way to Single best way to

sweeten your offer sweeten your offer without increasing (and without increasing (and possibly decreasing) possibly decreasing) your purchase priceyour purchase price

Signals financial Signals financial strengthstrength

Signals seriousnessSignals seriousness Reduces the seller’s Reduces the seller’s

risk by reducing their risk by reducing their carrycarry

2: Shorten the financing2: Shorten the financing If the Seller is If the Seller is

offering 5 years offering 5 years before the balloon before the balloon payment, offer 4, or 3.payment, offer 4, or 3.

Puts the seller’s Puts the seller’s repayment on fast repayment on fast forward, reducing his forward, reducing his carry risk.carry risk.

You actually reduce You actually reduce your total interest your total interest obligation.obligation.

3: Present a clean net worth 3: Present a clean net worth statement or Company statement or Company Balance SheetBalance Sheet Make sure your Make sure your

personal net worth personal net worth statement is accurate statement is accurate and up to date.and up to date.

If you represent a If you represent a Company – present your Company – present your current balance sheet.current balance sheet.

Signal your financial Signal your financial strength explicitly.strength explicitly.

The Seller’s confidence The Seller’s confidence about your ability to about your ability to meet note obligations is meet note obligations is increased. increased.

4: Write a letter4: Write a letter

Sell yourself to the Seller.Sell yourself to the Seller. Here’s why I’m the best buyer for your Here’s why I’m the best buyer for your

business.business. Signals high motivation to succeed.Signals high motivation to succeed. Reaches the Seller on an emotional level. Reaches the Seller on an emotional level.

5: Remove a contingency5: Remove a contingency

There’s plenty of There’s plenty of contingencies in contingencies in there… so you’re there… so you’re not losing your not losing your “out” “out”

A show of good A show of good faith – release a faith – release a hostagehostage

6: Forget the Earnout6: Forget the Earnout Seller’s signal their Seller’s signal their

confidence in a confidence in a business with business with willingness to base willingness to base your payments on your payments on future sales. future sales.

But they generally But they generally prefer cash today, or prefer cash today, or a guaranteed a guaranteed payment stream, payment stream, such as a promissory such as a promissory note with fixed note with fixed monthly paymentsmonthly payments

7: show that you 7: show that you understand the processunderstand the process Respect the processRespect the process

Make your requests through the seller’s Make your requests through the seller’s BrokerBroker

Honor timelines and deadlinesHonor timelines and deadlines Respond quickly Respond quickly Be professional always Be professional always And always - Continue to respect And always - Continue to respect

confidentiality – don’t let a anything confidentiality – don’t let a anything damage this business - you may own it damage this business - you may own it soon!soon!

8. Close Sooner8. Close Sooner

Set your offer for Set your offer for closing as soon as closing as soon as possible.possible.

Signal your Signal your confidence with confidence with moving forward.moving forward.

Remember – the Remember – the Seller has been Seller has been looking forward to looking forward to that day!that day!

Now your offer is Sweet! Now your offer is Sweet! SummarySummary In a competitive situation – you want In a competitive situation – you want

your bid to rise to the top.your bid to rise to the top. Any or all of these strategies can Any or all of these strategies can

make that happen.make that happen. And none of them are costing you And none of them are costing you

any more money!any more money!

Questions?Questions?

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