What Owner-Operator Sellers Actually Want
Most acquirers diligence the business and pitch the price. The sellers I have closed with were paying attention to something else entirely.
Every acquirer I know talks about price as if it were the dominant variable in the seller's decision. After a lot of conversations with owner-operators thinking about an exit, I have come to think that is mostly wrong. Price matters, but it is rarely the deciding factor for the deals that actually close.
What sellers actually evaluate
The owner-operators I have spent time with are evaluating four things, in roughly this order:
What happens to my people. Sellers who built a business over twenty years know every employee by name. They have been to weddings and funerals. They are not going to hand the keys to someone who will lay everyone off in month three to extract synergies.
What happens to my customers. The customer relationships were the most valuable thing the seller built. They want to know that the people walking in the door for service tomorrow get the same quality experience.
What happens to the business itself. Most sellers care whether the company they founded continues to operate as a real entity, not whether it gets stripped for parts and folded into something else.
What I personally walk away with. This is where price lives. It matters. It just sits at number four on the list, not number one.
What this changes about how I show up
I have learned to lead with the first three. In the first conversation, I describe what the operating plan would look like for the first year. Who keeps their job, what stays the same in customer service, what investments I would make in equipment and people, and how the seller's legacy gets preserved through the transition.
Price comes up in the second meeting, after the seller has decided whether I am the kind of person they want stewarding what they built.
Why other acquirers struggle with this
Most acquirers go in with a financial model and lead with valuation. They are not wrong that the math has to work, but they are showing up to a conversation about legacy with a spreadsheet. The seller reads it as a signal about what kind of operator they would be.
The sellers I have closed with were not the ones who got the highest offer. They were the ones who got the best fit. That math is harder to model, but it is the math that actually closes deals worth closing.
Written by Ramy Stephanos, SFAdvisor - Acquire.