Practice and Repetition

Practice and Repetition

Search cannot be mastered in a classroom, gleaned from cases histories, found on bookshelves or even in blogposts like this one. Instead, searchers must suffer through “rookie mistakes”, work outside of your comfort zone, get the “reps” in on the skills you need to pursue a business, purchase and lead it. Search is not the “New Private Equity”, but instead a different path to being an operational CEO. Search is all about “experiential learning” and you need to practice it to get better at it.

Malcolm Gladwell, in his book “Outliers”, chronicles some of the world’s best and brightest, the most famous and the most successful in their fields of endeavor. He postulates that many were in the right place at the right time, some not, but all honed their talent and skills through 10,000 hours of effort, repetition and deliberate practice. Searchers only have about 4,000 hours over two years and need to be comfortable with lots of detail, routine, banality, and tedium both in the search process and in leading the business afterwards. Check your mirror first; if this is not your strong suit, don’t head down this path!

“Repetition is the mother of all learning.” (old Russian proverb)

Sellers and brokers are naturally skeptical when they see from your LinkedIn profile that you are relatively inexperienced as a business operator. Developing your 30 second, 1, 3 and 10 minute “elevator pitch” is not just about getting it written down, but delivering it with credibility and confidence. Your seller wants to be confident that you can lead them through the transaction process and close the deal, and they want to hear it from you in your own words.

Every business owner and deal is different. Explaining the parameters in an offer – seller note, working capital adjustment, how long you will keep the seller on board are very important to the business owner. The more exposure you have to their questions, circumstances and nuances of the specific situation, the better prepared you will be for the next discussion. Adapting during negotiations with them will “toughen you up” and reduce the “surprises” that you hear in the next one. Searchers report that after 6 to 12 months, they have developed a confidence that is better believed by the seller. Most expect to achieve this credibility in just 6 weeks – it takes a lot more time practicing than they imagined.

Your processes are all susceptible to this same “experiential learning”. That is why a regular and rigorous review of your search progress is so important – from securing names of owners, qualifying them, and digging deep into their attributes, to determining the right next step to push the deal along. Too many searchers tend to “fire and forget” with their outreach campaigns and become reluctant to modify and tweak the degree of personalization of their mail/merge messages. It is critical to set goals and revise your processes as you “practice” the techniques you are learning. One searcher in their 7th month said, “this is a lot harder than I imagined, especially given my M&A experience. I had not anticipated how much learning there is.”

The additional challenge searchers face is that it is very difficult to see the results of your efforts. Sellers and brokers will be reluctant to tell you their impressions about how you are coming across to them. Having a CIM sent to you or an NDA signed by a prospective seller are milestones in a long process, so it is important to have recognition of these “small wins” part of your metrics. Weekly self-reflection, aided by your interns or peers, may help you look back and see the progress of your improvements.

To learn more, and faster, you must “get your numbers up” – your outreach numbers, your follow-ups, and your interactions with prospective sellers. With qualified sellers, be repetitive about reaching out to them every 30 days or so with a reminder that you are interested in a dialog. Even if you never heard from them in your initial outreach. Searchers report that this frequent follow-up often yields results after as many as a dozen repeat contacts. Even those who respond with a “no interest” indication only mean “no for now”. Searcher Matt Kittredge at Level Hands observed that “We started repeatedly following up with those we had already contacted and became re-engaged in meaningful conversations with owners and generated more Indications of Interest.”

Making offers – IOI’s and LOI’s

You can apply the “practice” concept to your offers. As part of the screening process in prospecting for opportunities, I often hear searchers say “they are just asking too much for this business and it is not worth making an offer”. If the business and seller meet the criteria for a “deal that could close”, then do not pass up the opportunity to practice and refine your skills at making offers. It may be that the fear of having your offer rejected is getting in the way of a learning experience.

The more you learn, the more productive you will be at wrestling with the options, details and issues surrounding each deal. You may even discover that the price of the deal becomes more reasonable as you proceed through the process. Your time is not wasted if you have the perspective that incremental opportunities to develop your negotiation skills will pay off for you in the future.

Sellers and intermediaries will sense your growing competency, flexibility and confidence. This is a great time to test your hypotheses about seller reaction to various deal terms, from the size of the seller note to the length of time the owner will remain in the business. Developing your negotiating strategy for these offers is important.

Most sellers have had years of experience bargaining with customers and vendors and want to feel they got a “good deal” when they exit. Searchers frequently move too quickly to a “best and final” offer and initially feel very uncomfortable negotiating. Be prepared for many rounds of discussions around terms from the initial IOI through the signed LOI. Getting that first LOI signed and moving forward into bank selection, legal negotiations and discussions with investors is important to have early in your process.

The educator that Malcolm Gladwell based his book on, Anders Ericsson, describes this effort as a special type of practice, “Deliberate practice takes place outside one’s comfort zone and requires one to constantly try things that are just beyond his or her current abilities. Deliberate practice relies on this fact that if you make errors, you’re going to find ways to eliminate those errors.” In essence, no gain without pain!


There are plenty of sports analogies that apply to searching, which emphasize that practices, drills, routines, and “reps” pay off in improved performance. Much of the activity in prospecting for and acquiring a business is not that difficult, but does take time and practice. Searchers are often disappointed in their own progress at early stages of the process and complain that they seem to be doing the same thing repeatedly without closing on a business.

The realization that each task is an opportunity to learn and refine your own abilities should encourage every searcher/CEO to embrace this repetition and learning as essential to getting you closer to your goal. As Reggie Stevens at Crescent Peak says, “you have to swing and miss a lot before you get a hit!”

Search on!

Feel free to share some of your own best practices or experiences in dealing with these issues in writing a blog comments. I encourage this dialog, allowing all to learn from both my views and the views of others – a virtuous learning cycle. Jump right in! Also, I frequently update individual blog posts, add to the Reference section and Search tips, so visit the website regularly.

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  1. Ryan on February 1, 2017 at 9:52 am


    I enjoyed this article. As a search fund intern who has witnessed the search phase from launch to closing, I highly recommend to any would-be searcher, whether post-undergraduate, pre-MBA, or MBA candidate, to work as an intern if they can before launching a fund. And not just dabble and experience the wavetops as some interns do, but really get dirty sending correspondence, making cold-calls, pre-screening with brokers and sellers on behalf of the fund. Financial modeling and database work is a standard skill set, the “selling” part of being a searcher takes experience and time, as you allude. To searchers, I recommend you give your interns leeway to make mistakes and assume many of your same responsibilities, as opposed to just modeling, proofreading, and database administering. It builds the bench and multiplies your efforts significantly and it also does the intern a great service. It’s basically a free opportunity to build the reps you speak of.


    • Jim Sharpe on February 1, 2017 at 1:02 pm

      I echo your thoughts about prospective searchers committing the time to “intern” with a searcher, for at least a week, with multiple searchers. And, yes, it means getting down and dirty in all of the processes. Unfortunately, I don’t see many searchers who have taken up this opportunity, especially before embarking on a path that may occupy a decade of their career; not sure why!
      As you point out, searchers have a great opportunity to provide “experiential learning” through “reps” for their interns by broadening the scope of their activities and extending their own efficiency. See my post on Searching with Interns.

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Posts – Contemplating a Search

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Random Quote

45-“Strategic partners” are very important to the business searchers.You want to rely on some trusted providers to support your business, you can’t do everything yourself!(See Blog Post-Strategic Partnerships)

42-Start early on legal documents, they often delay closings while under LOIBoth the searcher and the seller are plowing new ground and it takes a while to comprehend the meaning of all of the legal details .(See Blog Post-Getting to closing)

63 Searchers make promises they can meet to build trust with sellers. It is important to provide incremental opportunities to show that you can be counted on to deliver.(See Blog Post-Building Trust with Sellers)

34 Searchers who get access to employees before closing are more likely to close. Once the seller begins to confide in their employees about the sale of the business and introducing you as the “new owner”, they are more likely to proceed to finalize the transaction than to change their mind at the last minute.(See Blog Post-Getting to Close)

07-You are not a PE firm, don’t act like one!
Potential sellers resonate with your taking over their legacy, a PE firm is simply adding to their portfolio. Make sure your website looks personal and non-intimidating.

04-Fight Seller Fatigue in Due Diligence!
Sellers get worn out in this process. It is highly emotional for them, probably their first time at relinquishing their “baby” to someone else. During LOI stage, make it a practice to communicate with them, in person or by phone, every 2 days.

53-Holding monthly “all-hands” meetings indicates your transparency. Trust employees with what is going on with the business and they will trust you more .(See Blog Post-Communicating with Employees)

06-Use metrics to drive decisions
Track what is most important for your search – getting in front of prospective sellers to make offers to buy their business. Track the number prospects, IOI’s, LOI’s and set goals for yourself! If you measure it, you can improve it.

22-When in conflicts arise, remind professional advisors they work for you.
Inevitably, you will disagree with some advice you are getting. After checking multiple sources, do what feels right to you and move forward. You will have to “live” with your own choices, not the professionals!(See Blog Post-Professional Support)

18-Every day that goes by during Due Diligence raises the chance that you won’t close!
Time is of the essence when it comes to moving from a signed LOI to closing on your business. Seller fatigue sets in as the closing date gets extended and the seller constantly re-evaluates their motivation to sell. Only you can push the process along.(See Blog Post-Due Diligence)

44-Plan ahead, give thought to the small details of how you present yourself as the new owner. The first introduction to the employees of the business has a huge impact so you want every word to be rehearsed!(See Blog Post-Taking over the business)

50-Don’t expect immediate “loyalty”, the previous owner earned it, it takes time. You will need to earn the trust of your employees by your actions, not your words. (See Blog Post-Seller Tranisition)

35-Searcher CEO’s need to be prepared to walk away from volume orders if margins will decline. It takes a forward thinking CEO to seek out higher margin, value added opportunities to grow profits, not revenue.(See Blog Post-Wearing the sales hat)

09-Learn from others – read case histories
Over 40 case histories have been written about funded and self funded searchers in a variety of industries and historical settings. Each have great “lessons learned” and are worth the $10 cost to read them. Searchers are learners!

39-The business seller is “hiring” you to run their business. The owner trusts you enough to turnover the “legacy” of their business to you. (See Blog Post-Searcher Profile)

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