Do You Want to Sell Engineering Businesses or Buy Engineering Businesses?

sell an engineering business

 

If you are the type of Engineering buyer who sees value in what others call ‘a great potential Engineering business’ and is willing to pay a premium for it, then I invite you to consider a different way to approach this exercise. I will refer to it as the ‘extra effort’ approach.

For the purposes of what we are discussing, we do not need to be Engineering investors. We will use it as a validation tool to whether or not we should proceed with a business acquisition.

You see, great potential Engineering businesses are not all bought nor are they all sold. In a transaction with a hundred million plus dollars or more we can expect that we may find over half of this group of people who are not a threat to our transaction.

Until we reach this point with a transaction, we should proceed as if we are buying adjacent property. We look for an ‘opportunity’ to purchase the Engineering business with the intent to add more value as quickly and efficiently as possible, and then we act as if we are sitting on a property investment proposition.

This is not rocket science, this approach is used often in real estate transactions. It apportions huge opportunities into our purchasing discussions. It is easy to overspend (buy more than we need) and it is easy for Engineering buyers and sellers to stray out of our target reach.

Here are some thoughts for example:

Get an extra effort approach involves asking questions that encourage Engineering buyers and Engineering sellers to  layout their plans before listing their business for sale. They go into detail about their business, their strengths and their weaknesses. It is really kind of like preparing for a job interview.

Here are some considerations:

In summary, you stand a chance to obtain a competitive advantage by addressing this vague exercise with Engineering buyers and Engineering sellers individually. There is no way you can do this for a listing.

For example, one Nashville Recycling Company I know started a newsletter with a call to action of “If you are thinking of buying an Engineering business, email this connection to me or call the number.” She not only got a few calls but also got several emails. This was a simple step and her position as a business expert was reached by writing short articles read on her blog.

Not every real estate transaction will allow you to leave the Engineering site, although you may wish to do so. You could simply assume that if you are inspired to do so from the perspective of creating value for the seller, the eventual listing will succeed.

If you are thinking of buying an Engineering business, make sure that you have a purpose, an agenda to ‘help buy’.

1) It is important that Engineering buyers outline a plan for their inside knowledge of your market, your industry and how to go about the process. If the buyer expects you to show them otherwise, it is an easy way out for them, if your purpose in talking with the buyer truly has something to offer beyond what they get from you, start to get uncomfortable.

2) If you are your own Engineering vendor make sure that your clients are as excited about it as you are. Part of the value equation for yourself and/or your company is the value of the relationships they have with the vendor. It makes no sense to sell with high hopes and dreams of anyone else’s Engineering business.

3) Engineering Buyers are humans too and humans become tired and infatuated when they have extracted their observations on massive cons in a short amount of time and end up seeing nothing, well, nothing. This is where the buyer’s true interests in the business may lie. Will you hold or is this a different time for the Engineering buyer than the one you have making it exasperant.

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