10 Ways to Be a Competitive Buyer in a Seller’s Market

Many agency owners would like to acquire another firm that is compatible with theirs. Agency owners today want to be buyers of agencies with books that might be a great fit with the same type of business the agency already writes. So, what is it that makes buyers more attractive to sellers?

In our consulting work matching buyers and sellers, we find that there are certain attributes of buyers that set them apart. This article addresses the attributes that could help buyers win the deal.

Remember the price that a buyer is willing to pay is not everything. Sellers have spent decades growing their company and are often emotionally attached to their staff and clients. Owners want to see the firm succeed after the sale.

For most firms however, organic growth is always the best way for an agency to grow. However, organic growth often cannot provide the level of growth that is needed for many different reasons. When that is true, these acquisitions of agencies or books can greatly help the agency acquire the volume they feel they need to attain in order to be a larger independent player in the marketplace or with their markets. If the firm is publicly traded they may need to provide more revenue to the owners or stockholders, so they may pay above average prices.

The attributes that make most buyers competitive include:

Remember today is a seller’s market, which means that buyers must have some flexibility. When an agency is a good “fit” with the buyer, the price can usually work itself out with willing parties, especially if the attributes in this article are in place or an option. Having a third party to assist also can help.

There are key compatibility issues that buyers and sellers need to keep in the forefront when determining if a seller is a good “fit” for a buyer. These will be discussed in an upcoming issue.