Sourcing Deals - Tips?

February 17, 2021

by a searcher from University of Pennsylvania - The Wharton School in Philadelphia, PA, USA

Having been an entrepreneur through acquisition for the past three years, I'm comfortable with the deal making and operations aspects of search. I feel less qualified when it comes to the "search" part. Can anyone recommend resources for a coherent and thorough search strategy for deal sourcing. To date, I've found deals through BizBuySell.com and business brokers, but that's the stuff everyone sees...

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Reply by a searcher
from Columbia University in New York, NY, USA

^redacted‌ It would be helpful to know more about your acquisition goals. Different businesses types (and locations) are amenable to different proprietary search methods. Whatever the case, you'll want to develop a program to automate as much of that process, even if the automation comes from systematized work from freelancers.

For a SaaS-based search, like mine, we automate collection through numerous online databases, and then run campaigns. We learn a lot about businesses, but the quality of these leads are naturally low, since the vast majority of them are not even thinking about selling (right now, at least).

There's still nothing that beats a personal lead. I recently saw ^redacted‌ speak at an event in NYC (well, virtually in NYC). He emphasized in-person meet-ups with referral sources (accountants, lawyers, industry professionals are a classic case). To date, our most promising leads come through that door. This is with the caveat that in-person is tougher now, but you can start building the infrastructure and check out networking organizations via Zoom.

We see it as a three-legged stool: brokers, proprietary sourcing, and networked sourcing. We intuitively believe that category #3 will be where we find something great. The other two categories teach us a lot, and hone our skills for when the right opportunity walks in the door.

Reply by a searcher
from Pomona College in Las Vegas, NV, USA

I would steer clear of bizbuysell. More eyeballs are on a potential deal, making it more competitive. I am going to cold call businesses directly. Let me know if you're cold calling. Here's my process:

Hire and train a VA and manually source deals looking through the following databases:
-reference USA
-D&B Hoovers
-Google maps
-Yelp
-Google search
-industry specific databases (I am in mental health so I use the SAMSHA website. Find out what yours is)

The more fast and "expensive" route is buying lead lists. What I recommend:
-Dataaxle Genie (about 32 cents per lead)
-Exact Data

Hope this helps.

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