A “Searcher” is an individual (or perhaps a couple of individuals working together) who is actively seeking to acquire and run an existing small or medium-sized business through the process of Entrepreneurship Through Acquisition or “ETA”. Searchers are typically motivated by the desire to become business owners and operators without starting a business from scratch. Instead of creating a company, they look for an established business, with the goal of acquiring it, improving it, and driving its future growth. Some prefer what they see as underperforming whereas others look for ones that are firing on all cylinders and want to invest in further growth.
Searchers typically have diverse backgrounds and may come from fields like finance, consulting, or other industries. The Searcher tries to bring a fresh perspective and energy to the business, and they may have access to networks of investors and advisors to help fund the acquisition and execute improvements.
Why Should Sellers Consider a Searcher’s Proposal?
- Smooth Transition of Ownership: Many business owners, particularly those nearing retirement or facing challenges in managing their companies, are looking for an exit strategy. A Searcher can offer a way to transition ownership smoothly, with the intention of maintaining the business’s legacy and growth. Searchers are often highly motivated to keep the company operational and thriving.
- Experienced and Committed Leadership: While Searchers may be new to the specific business they acquire, they often bring significant business acumen, fresh ideas, and enthusiasm. This can be a welcome change for businesses that may have plateaued or are struggling with leadership issues.
- Alternative to a Traditional Sale: Sellers may not want to sell to a large corporation or competitor, which could lead to significant changes in company culture, layoffs, or a loss of their personal influence on the business. A Searcher typically aims to preserve the business’s existing structure and staff while improving operations, which can be appealing to sellers who care about their employees and the future of the company.
- Flexible Deal Structures: Searchers are often highly motivated to make a deal work, so they may be open to flexible financing options or creative deal structures. This can include seller financing, where the seller acts as a lender for part of the sale price, or an earn-out structure, where the seller receives additional payments based on the future performance of the company.
- Focus on Small to Medium-Sized Businesses: Searchers are generally looking for businesses in a certain size range, typically with annual revenues between $1 million to $10 million. These businesses may not be attractive to larger private equity firms or corporate buyers, but they can be a great fit for a Searcher who is committed to managing and growing the business.
- Speed and Simplicity: The process of selling to a Searcher can be faster and less complicated compared to traditional buyers like private equity firms or large corporations. Searchers typically don’t require as extensive due diligence or long negotiation processes, which can lead to a quicker and smoother transaction.
In short, selling to a Searcher can offer a personalized, committed buyer who is focused on maintaining and growing the business, while also providing the seller with a flexible and efficient exit strategy. If you want to learn more – please reach out.