
The Deciding Factor: Why A Seller Won’t Sell Their Practice to You
As we discussed in our previous post Four Factors for Fit, there are many factors you must consider as a buyer before signing on the dotted line. The seller must also consider a number of factors, including fit. But there is one other criterion you must meet before they will even engage with you, much less sell to you. They must feel like they know you, that they like you, and that they trust you to fulfill the terms of the deal and that you will carry their legacy forward.
The know, like, trust factor is often overlooked by buyers. The one who wins the deal is the buyer who understands its importance and looks for opportunities to build a relationship and personal connection with the buyer. It is through that relationship and connection that trust is built. Creating that connection is not as hard as you think.
First, as you are starting to identify possible books of business for sale, network with the "grey haired" advisors in your region. This allows you to build rapport with prospects and even identify and capture opportunities before they are even on the market. By seeking out relationships and learning about senior practice leaders, you are building a reputation and familiarity long before the deal. This establishes a foundation of trust and allows owners the opportunity to get to know you and decide if they like you before they see your name on a roster of potential buyers.
Another thing smart buyers to do cultivate the "know, like, and trust" factor, is they cultivate a clear and compelling message for the seller. To do this, draft a written letter that shares your personal story of how you started your career as a financial advisor, why you started your practice, your vision for your business, and your reasons for expanding. Focus on sharing genuine and personal stories and examples from your life, including examples of how you go above and beyond for your clients. Be sure to draw as many connections to the seller as possible, including identifying how their story and their unique practice fit into yours and how you plan to carry their legacy forward.
In our experience, buyers who use this approach are able to identify and close a deal in under twelve months, which is a fairly speedy timeline as far as acquisitions go. In addition to a speedy transaction, this approach can help buyers eliminate competition by standing out among other prospects in a positive way, and by securing deals before the market is aware of them. In a world where the competitive edge is easily lost, every opportunity to stand out and seize growth is valuable. If you are looking to grow your business through acquisitions, check out our guide on the 10 Steps Before Your Buy. In it we outline critical steps you can take to prepare your practice for growth and ways to avoid common challenges that hinder a buyer’s progress.