Lookie-Loos & Serious Buyers

Confidentiality Agreement Concept. Golden Cog Gears. 3D.

“Half the time men think they are talking business, they are wasting time.” – E. W. Howe


My first blog, What Should You Expect At Your 1st Meeting With A Financial Advisor?, was an effort to help retail consumers separate serious professionals from hacks so they can more easily identify a financial advisor who can truly help them achieve their goals. Lately I’ve been thinking about my experience with prospective sellers and it occurred to me; “Sellers don’t really know how to identify serious Buyers and identify the firms that are truly ready to help them achieve their goal of selling.” This week’s blog is my humble effort to help rectify that situation, to help serious Sellers separate serious Buyers from lookie-loos.

First, a serious Buyer won’t knowingly waste his time. He will do his homework upfront. As soon as he knows your name or the name of your firm, deliberate and methodical behind the scenes research will begin.

The process may begin with an in-depth review of your current web-site, reading each page word-by-word, searching for specific information, and taking good, written notes on items of importance. Your web-site can easily be pegged as custom, semi-custom or canned. It will identify what you believe is important, what your process is, how you do business, and your key people. You may not understand everything your web-site says about you, but a critical analysis reveals a lot of important information. Essentially, a serious Buyer knows how to dissect your web-site and get more than a 30,000’ view of you and your firm. He may not have a hi-def image just yet, but he will know much more than you think.

A serious Buyer may then move on to your social media pages, both business and personal. Using the same intentional approach, he will start scrutinizing every post, every image, every comment, every word, and every detail. Your social media pages speak volumes about your business and you as a person. If he’s been able to identify your employees by now, and he probably has, he will do the same to their social media pages. And don’t think that you have your pages locked down so tight that he can’t access all those personal posts. It is a relatively simple thing to use perfectly ethical and legal means to gain access to personal pages you thought were off limits. His image of you, good or bad, is starting to come into focus.

The next stop could be a public records search. ADV’s, CRD’s, CFP Board, and other industry records are definitely an area of consideration, but it doesn’t stop there. There are a multitude of business’ which, for a very small fee, will check property tax records, court records, arrest records, etc …. Those same services will also find you and your business anywhere you may be mentioned on the internet. A serious Buyer hasn’t even met you yet, but he has built a dossier on, your business, and your employees.

Why do I bring this up? Because a serious Buyer is just that. He understands that the first telephone call or email initiated the due diligence process. He understands that a buy is actually an investment and he has started the process of identifying risks and opportunity; he has begun underwriting.

You will be able to easily identify this person at the first meeting, because he will already know a lot about you, your firm, and your employees. On the other hand, a lookie-loo will know little to nothing about you or your firm. The extent of his knowledge may be what he read on your web-site in the parking lot just before he walked in to shake your hand. A little inquiry on your part will “separate the men from the boys” so you can decide whether to extend the meeting and share information, or end it quickly without having divulged information or wasted time.

Why is this important? When I interview job applicants, I always ask them to tell me what they know about our firm. Most can tell me little to nothing, which screams loud and clear that they don’t know whether or not they’d enjoy working here, don’t care whether or not they get the job, and so forth. These are my lookie-loos and most applicants fall into this category. Then there are the handful of applicants that summarize our website and our social media pages. They took the time to determine whether or not they believe they would enjoy working here, enjoy the job, enjoy the industry, etc … These are my serious applicants. Lookie-Loo interviews are ended quickly, while the interview of a serious applicant continues. My goal is to hire the best candidate for the job and I don’t have time to waste. Only a serious applicant progresses to become a candidate. Now consider how this common interview technique applies to you as a serious Seller.


“Someone wasting your time is far worse than someone wasting your money.”  – Mitch Thrower


Now it’s time for the first conversation. Some Buyers may prefer the telephone. I prefer face-to-face. And I will come to you. The reason I prefer face-to-face is because now I have to screen out people who are wasting my time.

Have you ever run across that “prospective customer” that will never really become a customer; he’s just searching out free advice and investment recommendations to take back to his DIY online account? There are Sellers like that too. They just want to find out if they could sell their practice and if so, for how much. They actually have no intention of selling, but they will waste a lot of a Buyers time and money. I am not in the habit of wasting my time or my money and a face-to-face meeting helps me easily screen out lookie-loos in short order.

Assuming you are a serious Seller, expect a serious Buyer to have a lot of open-ended questions. These won’t be random questions, but will be well thought out, deliberate questions, that can’t be answered well on a written questionnaire. He may even pull out pen and paper to take notes. Be forewarned, he probably couldn’t care less about social interaction. Your golf game and new sailboat have absolutely no bearing on the underwriting process. Other than some initial ice-breaking, he probably doesn’t want to hear much about your personal life. He already has that information, remember (His upfront homework)?

  • “Why do you want to sell?”
  • “What do you hope to accomplish with a successful sell?”
  • “What are you looking for in a Buyer?”
  • “What do you envision a Buyer doing with your practice?”
  • “Who are your key employees?”
  • “What makes them key employees?”


A lookie-loo will have random questions, questions about things that have no real bearing on underwriting, a line of questioning that leads nowhere, may be willing to run down rabbit trails, and is probably more interested in social interaction than business. A lookie-loo is unprepared. He doesn’t understand that underwriting has begun and is more than willing to waste your time.

A serious Buyer will also be willing to answer your questions and he should be able to do so quickly and in a well-articulated manner. A lookie-loo will fumble through serious questions, because he has never considered them before. He has never asked and answered those questions of himself. Don’t know what to ask? Two simple questions can screen out a lookie-loo.

  • “How often do you update your Business Plan and how does my practice fit into your Business Plan?”
  • “What is it about my market that interests you?”


A lookie-loo doesn’t have an answer to either, because he probably doesn’t have a Business Plan and if he does, doesn’t update it regularly, and certainly hasn’t figured out how you fit into that Plan. If he is outside your market, a lookie-loo probably knows absolutely nothing about your market.

This conversation will not include questions about confidential information. A serious Buyer may ask, but he won’t be offended if you refuse to answer. He understands the need to keep proprietary information proprietary right now.

By the end of the conversation, a serious Buyer will have decided whether or not to proceed any farther. If he is interested, a serious Buyer will likely produce a formal Confidentiality Agreement, prepared by a talented attorney, completely filled-out, and ready to sign. And he may have already signed it himself. It will be binding on both parties and may require an Exclusive Look for a specified period of time. He will expect a serious Buyer to sign it on the spot, but may grant you a very short period of time to sign, perhaps 1 calendar week. Remember, serious Buyers aren’t in the business of wasting their time with people who aren’t serious Sellers.

A lookie-loo will again be unprepared. He will likely have nothing ready to begin the process and when asked, may not know what a Confidentiality Agreement is or have even considered the need; though he might want to give you some mass produced sales materials (because he is unprepared and has no idea what he is doing).

Assuming you’ve signed a Confidentiality Agreement the next step is in-depth due diligence. A serious Buyer is making an investment, but there are no analyst opinions, star ratings, or summary data for him to evaluate. He is going to have to gather raw data, evaluate it himself, create his own opinion, and assign a value (price). Think about it. You wouldn’t invest $10,000 of a customer’s money without knowing everything about the investment. A serious Buyer is (you hope) considering a multi-million-dollar investment of his own money. Isn’t it reasonable for him to want to know your firm inside and out?

This is where you can expect a serious Buyer to provide you with an extensive, written, request for information. He’ll want your answers quickly, because he doesn’t have an infinite Exclusive Look. He has to analyze your answers, gather follow-up information, price your business, run Pro Forma financials that include a successful purchase, and much more. Your failure to provide information quickly will identify you as a lookie-loo, causing a serious Buyer to promptly loose interest.

However, if your “Buyer” doesn’t know what to request, has a short list of questions, questions with no line of reasoning, takes more than 24 hours to deliver his questions, or doesn’t care how long you take to answer his questions; then Congratulations! You’ve jumped in bed with a lookie-loo who has now taken your business off the market (Exclusive Look period). How many serious Buyers took a look at your market and didn’t see you because of this? Of course, if you haven’t screened out lookie-loos by this point in time, then you probably aren’t a serious Seller either.

Expect, at any point during the Exclusive Look, to receive an offer or a declination. Expect it to be in writing. A serious Buyer will notify you as soon as he has made a firm decision. If it is an Offer to Purchase, it will once again be a formal, written, legal document prepared by an experienced attorney. Among other things, it will spell out what is being purchased, the price, the structure, and any conditions. It will also declare a drop-dead date for you to accept. After that date the Offer is rescinded. A Declination will be much less formal. Why spend more money to inform you that he has decided against purchasing your business? That’s just bad money thrown after good.

There are many points at which to identify a serious Buyer and many points at which to weed out lookie-loos. The process remains the same whether you are searching for an outright sell or a merger.


“… the rarest and most valuable of resources is the time of a talented professional …”  – Excerpt from the Sapiat Asset Management Business Plan


No successful person has time to waste. Serious Sellers need to find Serious Buyers. Knowing ahead of time what to expect helps both conserve their most valuable resource and readily identify those worthy of its consumption.


Sapiat Asset Management is an independent registered investment advisor, specializing in financial planning based, asset management for Gen X Individuals & Families and their Trusts & Businesses. We are serious and prepared buyers. Sapiat will make a fair, up-front, cash offer to purchase the right book in the right markets. And we’ll do it quickly.

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