Searchers - What business to target for an acquisition?

June 13, 2022

by a searcher in Burlington, VT, USA

Hi everyone! I've spent the past few months learning a great deal about searching and ETA. I learned a lot about LBO and deal structure, etc. But the one thing I still don't quite know is:

What type of business should I target for an acquisition?

I've heard that I should look for businesses that would benefit from my experience. I have a background in sales, recruitment, copywriting, and teaching (education/training). I also was a regional manager of a consumer services firm.

That's why I looked into the education sector. However, the tutoring and childcare businesses aren't really my cup of tea: low CLV and high churn rate aren't attractive to me. I'm attracted to B2B and B2G services, but my head is still spinning at how many choices are out there.

Any advise on how to settle on some parameters for my search? Thanks in advance!

Reply by a searcher
from University of Oxford in Austin, TX, USA

I would definitely second what Kenneth said. Start talking to people and signing NDAs even for businesses that you don't think you would actually buy. I saw some research a while ago that the most common trait in someone who acquires a small business is that they tried to acquire a similar business in the past and it didn't work out. But the failed experience confirmed the industry and business type that they were interested in, allowing them to focus on that in the future.

Reply by a searcher
from University of Hartford in Portsmouth, NH 03801, USA

At this point, just start signing NDAs and asking for CIMs. Get the reps in. It won't be a waste of time. It will help you dial in on what's a good fit for your personality and background. Yes, you may have some awkward conversations with brokers, but sometimes the best way to do something is to just start doing it.

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