“The Bank Said the Business Is Overpriced” — Now What?
This week’s question comes from a buyer who was trying to get financing for a business purchase. But the banker came back with two tough comments:
“The business is overpriced, and your Debt Service Coverage Ratio (DSCR) doesn’t work.”
Naturally, the buyer wants to know: Should I try another bank?
Let’s unpack what the banker really means and how to make your next move a smart one. https://youtu.be/Q1yOzL73zCoThis is one of the smartest strategies in the business acquisition world. Here’s why:
When a business gets listed with a broker, two things happen:
Competition surges — multiple buyers show up, and
Prices rise — often beyond what a savvy buyer wants to pay.
That’s great for sellers. But for buyers? It’s an uphill battle.
Instead, what if you could build relationships with owners before they ever consider selling? That’s where the real opportunity lies.
The Strategy: Beat the Broker to the Door
If you want to find quality businesses at fair valuations, you need to show up before the “For Sale” sign goes up. Here’s how to do it right:
✅ Step-by-Step Guide
1. Know What You’re Looking For
Before you approach anyone, you need to be clear about what you want.
Ask yourself:
What industries interest me?
What skills and experience do I bring?
What’s my ideal role as an owner?
Do I want something owner-operator or hands-off?
This self-assessment helps narrow your focus and makes your outreach much more credible.
2. Set Your Financial Parameters
Next, define your buying power:
How much capital do you have?
What kind of financing can you secure?
What’s the minimum income you need from the business?
This determines the size and structure of the businesses you should pursue.
3. Build a Target List
With your filters in place, start researching businesses that:
Fit your chosen industry and size
Operate in your geographic area (unless you're open to relocation)
Have owners who may be nearing retirement or looking to slow down
Appear stable but may lack clear succession planning
This is where tools like LinkedIn, Google Maps, local trade associations, and business directories come in handy.
4. Make the First Move — With Tact
This is not a sales pitch.
It’s an introduction.
Reach out by email, letter, or even an old-fashioned phone call. Say something like:
“Hi, my name is [Your Name]. I’ve been researching businesses in [industry], and I came across yours. I admire what you’ve built. I’m exploring business acquisition as my next career move, and if you’re ever open to a conversation—now or in the future—I’d love to connect.”
Keep it low-pressure. You’re building rapport, not making an offer.
5. Play the Long Game
Most business owners won’t reply with:
“Funny you should ask, I've been dying to sell!”
But here’s what can happen:
They remember you
Time passes
Life events occur (health issues, burnout, family needs, etc.)
You become the person they reach out to first
No broker. No bidding war. Just you and the seller, having an open, private conversation.
Consistency Wins
This approach isn’t about quick wins. It’s about building a pipeline of future opportunities. When others are chasing listings, you’re building relationships.
That’s why in my 12-step coaching program, we teach exactly this process:
How to define your criteria
How to assess your buying power
How to find and qualify target businesses
How to craft outreach messages
How to follow up and stay top-of-mind
It’s a discipline but it works.
💬 Final Thought
If you want to be taken seriously by a business owner before they’ve even considered selling, you need to:
Show up early
Show genuine interest
Stay in touch without pressure
This is how the best deals are found not on websites or broker listings, but in private, well-timed conversations that you created.
Explore free tools, guides at www.BusinessBuyerAdvantage.com
Don’t forget—join my email list for early access to my latest videos and insights at DavidCBarnettList.com. You’ll even receive 7 FREE gifts when you sign up.
– David C. Barnett
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