Buying a Business: A Year and a Half Searching, Lessons Learned so Far

Buying a Business: A Year and a Half Searching, Lessons Learned so Far


Hey there, my name is Tim and I've been searching for a business to buy for about a year and a half in British Columbia, Alberta and online. While doing this, I've been building up my own craft cider business as well as growing a local construction company. This journey has taught me an immense amount about acquisitions on both the technical and soft aspects of the process. Today, I'm sharing some of the soft lesson's I've learned along the way. Hopefully, they will be helpful for people looking into buying a business. Or, maybe you will have some advice for me after reading.

Here are the lessons summarized:

  1. Keep your job. It’ll take longer than you think.
  2. Your target will change.
  3. It's kind of lonely.
  4. You're a salesperson.
  5. Be genuine.
  6. Deal flow isn't always there.
  7. Everyone has an opinion.


Lesson 1: Keep your job. It'll take longer than you think.

When I began my search, I was confident that I would beat the 1 to 3-year timeline for buying a business and find one within 6 months. I was even considering quitting my job to search full-time. Now, after 1.5 years, I realize I was naïve. As a traditional searcher, I don’t have big funds backing my search. If I had quit, I wouldn’t have much cash left at this point to buy a business and would probably have to find a new job. Additionally, your job can provide a social environment and fulfillment for when the search is solitary and lengthy. While there are those who end up buying in 3 to 6 months, I believe that luck often plays at least a partial role in this. For me, it took the first 3 months just to figure out the right questions to ask the seller. You'll find it much easier to keep emotion out of your decision making if you have a job that is supporting you.


Lesson 2: Your target will change.

If you’re like me, you haven’t had a career in M&A prior to searching. You probably haven’t had enough exposure to know exactly what you want. For the first 6 months of my search, I wanted an e-commerce business. However, over time, I’ve shifted my focus to brick-and-mortar businesses because of the lack of quality I was seeing. Then, I had preference in health, wellness, recreation, and eco-consciousness but couldn’t gain enough traction. Now my focus is primarily on distribution, manufacturing, training, and industrial businesses. If you’re going for a proprietary outreach strategy, you might have 4 or 5 target statements to help you really narrow your focus down to specific businesses such as HVAC or safety training. As you become more educated by looking at more businesses, you realize what works, what you like, and what you don’t like so you can adjust your target accordingly.


Lesson 3: It’s kind of lonely.

When starting my search, I reached out to my network looking for potential partners. What I learned is that most small business owners don’t understand the reason behind buying instead of building, they don’t have the time for it, or aren’t interested enough to pursue it. You will likely experience this with your friends and family as well. Even though you’re talking all day during business hours, you won’t be able to have a truly engaging conversation about your passion with some of your closest friends and family.

In contrast, you’ll be talking with lots of people every day. I’ve found that most people are helpful and friendly. However, it’s usually a bit transactional. This is where a group like the Acquisition Lab helps. With a community of like-minded people, you can have someone to talk to about the difficulties you go through each week and can get validation on some of your experiences. The one caveat with all this outreach is you'll likely meet a handful of people that you naturally gel with and that you build lasting relationships with.


Lesson 4: You’re a salesperson.

Whether you’re using a direct outreach or intermediary outreach approach, your goal is to sell yourself through networking. I've found that developing the skill of getting comfortable talking to people and reaching out is important. While taking sales classes may improve my skills, I mostly focus on simply being a decent person and trying to build real relationships. As a salesperson, it’s important to track relationships. I use Hubspot CRM and LinkedIn to make sure I’m not going too long without reaching out to someone. However, I could improve by getting face-to-face more often. I’m located in a small town called Kamloops and it’s impractical to go to hubs like Vancouver or Calgary for a brief 30-minute coffee. But when I have made the trip, the connection is much better.


Lesson 5: Be genuine.

A strategy that some buyers employ is to put a higher price in an LOI to get a deal locked down with the intention to keep grinding the price down through due diligence. I haven’t tried the strategy but have come across buyers who openly recommend this. While it may be an effective strategy, it’s risky. You’re risking your due diligence fees and the relationships of your team and the sell-side team. The M&A community is relatively small and nobody wants to work with someone who is playing games. Even though I don’t have experience with this approach, I do know how important trust with the seller is in moving a deal forward. Don’t shoot yourself in the foot for future deals to earn a few extra dollars toying with someone’s legacy.

The second part of this lesson is about relationships. Searchfund strategies can typically include reaching out to 1000s of businesses and intermediaries across North America. To get the deal flow they need to close, they probably must do this. But it’s important to curate quality connections, especially if your geographic area is limited. For myself, my area is British Columbia, Alberta and online (e-commerce) and there aren’t that many M&A professionals in my size range. So, I spend the time curating messages to intermediaries and business owners. It takes much more time to create quality outreach, but being genuine will create better relationships.


Lesson 6: Deal flow isn’t always there.

If you’re doing a traditional search and working mostly with intermediaries, you’ll find that sometimes there are lulls in deal flow. If you’re not doing a proprietary search, you can find yourself with not much to do. This especially happens for certain industries like retail. In retail, nobody wants to sell during November and December because they are their best months. They would rather go to market in the new year when they have their higher numbers recorded. This is where it’s nice to have an acquisition course, job, or side business so you can still be productive. Or, as I’m considering, refine your target a bit more and do a local direct outreach program to business owners.


Lesson 7: Everyone has an opinion.

I gladly accept anyone’s advice. After all, I’m still pretty new to the M&A world. However, I realized quickly that there are many heavily debated topics and you’ll have to weigh what is best for you. For example, working with intermediaries is my approach because I believe they weed out sellers who aren’t ready to sell, get the company ready for a transaction, and help facilitate negotiations. However, some people are adamant that direct outreach is best because you can get better deals that are focused on your target area. Both methods also have drawbacks. Working with an intermediary could backfire if they miscalculate the valuation and set seller expectations too high. On the other hand, direct outreach is extremely time consuming. You will frequently encounter more debates on topics such as earnouts, multiples, and industries. I’ve learned that I need to listen to all these arguments, so I can make educated choices on what will work best for me.



Thanks for reading my first article. I'd love to hear your thoughts on my process so far. You can reach me via the form on my website or on LinkedIn. I'll be sure to write further articles to keep you up to date on the acquisition process.


Leave a comment

Please note, comments must be approved before they are published

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.