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Ownership changes at small family-owned companies can be an emotionally charged process, according to Paul Smith in Six Keys to Successful Acquisitions. Because of this, companies looking to acquire should build a positive relationship early on. This is critical to a successful transaction.
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Shareholders at privately owned companies consider a plethora of factors beyond purchase price such as:
If a prospect shows any interest in discussions, send an information package on your firm to set a tone of open communication. Don't assume he is familiar with your business even if you are larger or located nearby.
Acquirers should be prepared for a long process with a low initial response rate. Acquirers shouldn't feel insulted when targets don't quickly respond to inquiries. Companies may wait years after an initial contact before calling to say they are ready to talk.
A reality of the current state of distribution is that some will feel financial pressure to exit and may respond more quickly than normal. Or the recession may have delayed retirement plans for the owner who is now looking for a strategic exit. Patience and a demonstration of understanding their situation can go a long way towards building their trust in you.