Dealmaking tips from a top intermediary

I interviewed Sarah Goodman at an event a few weeks about working with the sell-side. She gave a masterclass on buying small businesses that was so insightful, it had me taking notes during my own interview. Here are some of her pearls of wisdom:

1) One key red flag for buyers out of the gate is when an intermediary uses a "toothy" NDA and financial disclosure request but provides very little info in return. Disclosure should be balanced on both sides, though an LOI is often required to talk to the seller.

2) In a lower interest rate environment, getting deals done was easier. Before you get too far with a deal, make sure you can actually get it done - talk to the broker and capital providers pre-LOI to make sure everyone is one the same page RE structure.

3) Letters of support from lenders are less helpful than buyers might think. Being able to structure the deal and close is more important. Be transparent and detailed.

4) The good news is that individual buyers/searchers can help themselves on structure. Even when a PE firm might be able to offer a higher number, depending on how much of that cash is deferred, buyers may be able to put more cash in the owner's pocket, even with a lower offer

5) Searchers should be selling themselves in terms of specific transferable skills. How can you stand out beyond your desire to preserve the seller's legacy?

If this was helpful, don't miss our conversation this upcoming Thursday with Lisa Forrest on all the changes to the SBA 7a program over the last year, streaming here on Searchfunder! Here's the link: https://www.searchfunder.com/event/view/1340