Today’s episode in our series about growing through a downturn is about acquisitions. This can be a great way to grow, but great caution must still be exercised. Doing an acquisition into an industry that usually falls deeply during a downturn could be a big problem.

We may or may not be in a recession, but if you’re a business that has been focused on things like strategy and building a strong culture, you’re better equipped to thrive during the hard times than most others in your industry. Acquiring businesses that weren’t as prepared as you can result in you saving so many employees that would otherwise be out of work.

Downturns are probably the worst time to sell a business, but the owners often have no choice. As the buyer, you need to be even more critical of the value you’re placing on the business during these times. You’ll have to think about how you’ll pay, and looking at owner financing can be a very lucrative opportunity. Just because you don’t have the cash in your bank account doesn’t mean you can’t buy a business.

You might run into a situation where the seller is in default with their bank, which means the bank is going to control most of the negotiation. It becomes very important to have an idea of what the lender would accept, along with making sure you’re negotiating with the party that can actually make the final decision.

Even more so in a downturn, it’s critical to work with the seller, build that relationship, and arrive at a reasonable price with them. Being willing to figure out a path together will usually get you to the finish line quicker. The seller note will often become the pivotal tool needed to get the deal done. Listen and we explain why and how to it can benefit both buyer and seller.