Skip to main content

Recently I had a Rotary Global Grant approved for our ongoing work in Antigua. As I was writing the grant, I realized there are a lot of similarities between our project, the grant process, and our day-to-day work with clients buying and selling businesses. This newsletter will cover seven similarities of projects with business buyers and next month I do the same for business owners/sellers.

Objective – We must articulate, in detail, what our project hopes to accomplish to get a grant approved. In our case, it’s supply technology and train teachers on how to reach their students more effectively with technology (versus using a 3’x5’ rolling blackboard). A business buyer must know what types of businesses they don’t want, what skills they bring to the deal, their capital, and an attitude of being open to business types they’re not familiar with as many deals come in through the “side door.” And most importantly, a good personality to build a relationship with sellers.

Team – Last time we had 14 students (who setup the computer labs and Wi-Fi networks) and 10 adults. We get a lot done. Buyers need to build a team and it should include a transaction attorney, CPA, deal pro (me), banker, and other experts as needed for environmental, HR (a big one and getting bigger), etc.

Money – Our project gets donations from at least three Rotary clubs and a foundation tied to Antigua that loves not only what we do but that we actually get results. We then triple it with a Rotary Foundation grant. Business buyers need to get their capital put together before starting to search. How much capital will come from the buyer’s savings and investments, is the spouse on board with that amount of investment, if investors are needed will they be friends and family or professional investors? Once this is settled it makes sense to talk with bankers.

Timing – We run our project on tight timelines. Grant submission, approval, shipping by a certain date, travel when the students are on break, etc. Buying a business has timing and timelines also. You’d think most things would be concurrent not consecutive but that’s not the case. For example, many buyers won’t fully engage their attorney until they are absolutely positive their loan is approved. Customers and employees can’t be talked to until the agreement is finalized (and often signed in advance). It’s why I tell buyers if they found a business today it will easily take 90-120 days to meet, build a relationship, get information, analyze, work out a deal, financing, legal, etc. All while the seller is running the business.

Implementation – Once our grant is approved we start implementing. Actually, we start prior to that by securing computer and other equipment donations. We can’t use grant money until final approval and some years that meant buying things the day after approval. Buyers need to do the same. Often, they don’t. Life gets in the way and a story in Buying A Business That Makes You Rich demonstrates this. Michael would tell me, “I’ll get to it after my next game of golf.” I quickly figured out there is always a next game of golf. We talked, he got it, he moved at lightning speed thereafter.

Secure agreements – The Antigua Ministry of Education and others must sign a Memorandum of Understanding agreeing to their responsibilities. For a Caribbean country I’d say they’re pretty good. We did have a year where we didn’t do a project because the government was behind on their obligations and from what I hear, one out of 11 is really good in that part of the world. Buyers need agreements also. They’re with the bank, landlord (the landlord waiver is often a challenge and Jessica recently lost a deal because the landlord wouldn’t offer a long enough lease), vendors, employees, customers, and others.  

Administrivia – When I look at all the little things we have to do to get 24 people to and from Antigua, students hosted by local Rotarians, lodging, cars, activities, little supplies we don’t know we need until we get there, etc. I wonder how my friend Jeff at Newport High School and I do it while having work and families. The same with buyers when they get near the end. It’s why I have a form, edited by seven buyers who had recently closed on deals, of all the annoying little things that need to be done before (and just after) closing.

What I illustrate above shows many things have common ground and other than the use of technology, not much has changed in decades. Buyers and sellers go through the same paces they did 20, 40, 60 years, only they have more tools to help.

Get Started With A Consult

This field is for validation purposes and should be left unchanged.