Simple Deal Builds Trust

Sarah Moore, who successfully acquired a multi-million dollar business with no money down, emphasizes the importance of keeping business acquisition deals simple and straightforward, particularly when dealing with small business owners. She believes that complexity breeds mistrust and can derail otherwise good deals.

Key Points:

• Keep Language Simple

  • Avoid business jargon and MBA terminology
  • Use plain language like "income" instead of "EBITDA"
  • Speak in terms sellers understand and relate to

• Deal Structure Simplicity

  • Basic seller's note structure is preferable to complex earn-outs
  • Avoid complicated terms that might frighten sellers
  • Focus on straightforward payment terms and timelines

• Building Trust Through Simplicity

  • Many successful business owners don't have formal education but are excellent operators
  • Complex terms make sellers suspicious and hesitant
  • Clear, simple terms breed trust and confidence

• Practical Application

  • Use basic math that can be done "on the back of a piece of paper"
  • Present terms in plain English
  • Focus on the core elements: purchase price, seller's note, and bank financing

• Why Simplicity Works

  • Sellers often don't understand sophisticated financial terms
  • Simple deals are easier to execute
  • Less room for misunderstanding or misinterpretation
  • Faster path to closing the deal

• Common Mistakes to Avoid

  • Using complex financial modeling
  • Adding unnecessary deal terms
  • Trying to sound sophisticated or intelligent
  • Overcomplicating the negotiation process