Meeting Owners

This week is going to start out with me meeting owners of two different companies. The first will be over Zoom, and the second will be in person. To prepare for these meetings, I have drafted up a list of things to emphasize and far too many questions to ask. What follows is the list I created for one of the companies.

The things that I want to emphasize are my cliff notes for making sure I am selected as the buyer of choice.

Emphasize

• Build rapport by our mutual engineering background

• This is a great business!

• Listen (DO NOT focus on what I am going to say next)

  • From what I hear, ask questions that show I am engaged (intellectual curiosity)

• Continuing his legacy and growing it

• My background overseeing smaller shops with similar folks

Many of the questions came from a great post by Naushad Parpai on Searchfunder about Pre-LOI questions, which linked to this Notion post. These questions are great, so I sort through them for the ones I already had answers to, and eliminated those. I also added my own, and then used the technique Walker Deibel describes in Buy Then Build. That technique is to jump around, so I get more spur of the moment and less canned answers. Here is my questions list.

Questions

1. Can you explain your marketing strategy?

2. Do all your jobs come through your sales manager?

3. You have done a remarkable job growing the company to its current size, how?

4. Can you walk me through the sales process from start to finish?

5. What are the business’s biggest strengths?

6. What is the business’s biggest challenge?

7. How does the supply chain disruptions affect the business?

8. How are your prices compared to your competitors?

9. Who manages inventory and how?

10. What would you say differentiates you from the competition?

11. How would you describe your company culture?

12. What is your attrition rate?

13. How do you go about locating more help?

14. Have you tried to grow the company larger? If not, why not? If so, what happened?

15. What are you going to do with the money from the sale?

16. Does your company have documented processes?

17. Can you walk me through a normal day?

18. Can you tell me about your worst customer?

    • How did you deal with them?

19. Who does the equipment maintenance, and who keeps track of when it needs to be done?

20. Does the business use an ERP or CRM?

    • If so, which ones?

    • If not, why not?

21. How does product pricing work?

22. Do you have slow periods, if so, what do you have the staff do during these periods?

23. Tell me about your HR processes?

24. Who is your ideal buyer?

25. Can the portion of your job relating to the professional engineer be outsourced as you do for other states?

    • If so, what does that due to your margin?

    • If I buy it, I would look to hire a PE to fill that portion, do you see any problem with that plan?

26. Is additive manufacturing a threat to the business? Have you considered adding it? (pun intended)

27. What are you hoping to achieve by selling your company?

28. What is your annual capital expenditure?

I have no intention of going through every one of these, or providing the seller or broker with this long list. Instead, I intend to use it as an outline and reference it myself when the free flow of information stops. Please provide any feedback, be it bad or good, especially if I am peeing on the third rail with any of them.

Questions 15 is, somewhat, none of my business, but it might help me to determine the structure I will offer in my Letter of Intent. If the owner is planning to buy a yacht he will need cash now, but if he is just going to use it for retirement he might be more open to seller financing.