CHAPTER 9 Sourcing Directly Flashcards
(14 cards)
Why did Ari Medoff choose direct sourcing over brokered deals?
To avoid competition, see opportunities before they were widely shopped, and tailor his search to his geographic preferences.
What are two major early steps required in direct sourcing that brokered sourcing doesn’t require?
(1) Finding owners willing to sell. (2) Collecting enough information to evaluate and reject uninterested prospects.
What is the typical response rate for generic email campaigns in direct sourcing?
Around 0.5%.
What are the benefits of direct sourcing according to the chapter?
Better pricing, higher quality companies, stronger relationships with sellers, and more control over geographic targeting.
What tools are commonly used to identify businesses for direct sourcing?
Online databases, business directories, and local chambers of commerce listings.
What is a practical advantage of email outreach over cold calling in direct sourcing?
Emails are more likely to reach the business owner directly, bypassing gatekeepers.
Why are unpaid interns often used in a direct sourcing search?
They assist with assembling mailing lists and conducting outreach while gaining business experience.
What strategy did Ari Medoff use to balance personalization and scale in outreach?
He used both a mass generic email campaign and more targeted, personalized emails to high-potential leads.
What are the three primary goals of the first phone call with a business owner in direct sourcing?
(1) Establish buyer credibility. (2) Gauge seller interest. (3) Apply initial filters to assess business potential.
What are some high-level questions to ask on the first call to help estimate company size?
Years in business, reasons customers choose them, competitors, and number of employees.
What profit range does the chapter suggest for target businesses?
Between $500,000 and $3 million in annual profits.
Why is seller motivation especially important to assess in direct sourcing?
Directly sourced sellers may not have seriously considered selling, unlike those working with brokers.
What should you do if a business owner invites you to visit early in the process?
Politely decline until the business passes initial and deeper filters to avoid wasting time and resources.
How can conversations with uninterested sellers still be valuable?
They may refer you to other business owners who could be good acquisition prospects.
