By Scott Bushkie / Guest Column

Most first-time business buyers start the acqui­sition process with an “I’ll know when I see it” strategy. As a matter of fact, many existing busi­ness owners come to our firm with this approach as well. It probably won’t surprise you to hear, however, that we don’t believe it’s a good use of your time (or ours) to engage in a sales scenario destined to go like this: “How about this busi­ness?” No. “How about this?” No. “This?” No, that’s not right either.

It reminds me of a seasoned business advisor I know, who is now in his 80s and works on the East Coast. Here’s what he tells his “I’ll know it when I see it” buyers: “I’d like you to go to your local airport. Watch the people come and go. Look for your future wife or husband. Once you’ve picked them out of the crowd, take them down to the chapel and get married. Once you’ve done that, come back to me and I’ll help you find a business.”

His point? The “know it when I see it” ap­proach wastes time and money and has little chance of success.

When we work with business buyers, we help them figure out what they want. But even more than that, we help them figure out what they need. That means figuring out what they’re good at and what they’re not, what they like and what they don’t.

Certain companies will benefit from certain types of owners. You can’t just buy something be­cause the margins are strong. Bigger is not always better. Just because you grow your top line doesn’t mean your bottom line will increase accordingly.

When I talk to college business students about mergers and acquisitions, I ask them to choose a company and then find an acquisition for that company. And I tell them to look beyond the ob­vious big-fish-buys-smaller-fish scenarios. I push them to look for synergies.

For instance, they might ask themselves, “What’s that one advantage my company has over our competition?” Then they find compa­nies that aren’t good at that one thing. In oth­er words, they find a company with a weakness that’s easy to fix.

By the same token, maybe they’ll target the one thing that’s holding them back and then find an acquisition target that does that one thing par­ticularly well.

It’s the same concept I try to relay to busi­ness owners when I ask them to imagine their business is like an hourglass. What’s the middle part that’s squeezing things in and slowing you down? Now, imagine you could find a business acquisition that would open that middle part up, even a quarter of an inch.

Questions like that can help move buyers past the “know it when I see it” mentality. If it doesn’t, then I typically suggest they hold off. If you don’t know what you want, don’t try to grow through acquisition. Grow organically until you have a plan.

Scott Bushkie is the founder of Cornerstone Business Services, a national M&A firm with offices in Wisconsin and Iowa that specializes in the lower/middle market sale of privately held and family-owned businesses. He is a fellow and past chairman of the International Business Brokers Association (IBBA) and a Certified Business Intermediary (CBI).