Jun 13, 2024

Deal Flow 101: How to Find, Segment and Outreach to Potential acquisitions

If you're looking to acquire a business, you'll know that deal flow is king. It's imperative to stay on top of finding potential acquisition targets, collecting relevant data, and reaching out to business owners. This process, though complex, can be streamlined with a clear strategy. From identifying suitable companies, to segmenting them for effective outreach and personalising your messaging, a comprehensive approach is key. 

This guide provides practical steps for each phase of the process, using the BizCrunch platform, helping you to optimise your acquisition strategy and have more conversations (leading to more acquisitions!).



Finding Leads: Top of the Funnel


At this stage, we’re likely beginning with three primary filters: location, industry and revenue. There are dozens of ways to filter this primary list down further as we move through the funnel, but for most acquirers those are the big three.


Location

BizCrunch provides both registered addresses and trading addresses, but at this stage I would recommend sticking with “all”. Trading addresses are harder to come by and will offer us fewer initial results.



It’s possible to add more than one location, or a region if you prefer. Again, we’re keeping this part of the search as wide as possible for now - we can narrow this down later. So include any location that you’re happy to work with.


Industry

Currently the industry field on BizCrunch uses the registered SIC code from a business’s Company House records (however our AI-powered classification system is coming soon!). When searching through the industry list, it’s often possible to drill down three or four levels, enter specific SIC codes or even search for specific keywords, however it’s often advisable when creating the top of the funnel point to simply go through the 20 high level categories and select the relevant ones.



Revenue

This is where the BizCrunch search comes into its own, allowing you to search on estimated revenue - a boon when searching for the 97% of companies turning over less than £10 who don’t publicly report their revenue. As that figure is so high, I recommend always leaving the ‘Estimated BizCrunch Revenue’ box ticked.


With these three in place, you should have a broad enough TOF (top of funnel) to then begin segmenting and reaching out to. It may be that you’re a sector-agnostic acquirer and you need multiple funnels for multiple sectors, or locations! 


You can of course add other filters if they are ‘must haves’, however the aim of this TOF is to create a broad list that can be segmented so this is usually not necessary. However if there are any absolutely crucial lines in the sand for you - years established, max number of PSCs, majority shareholder age, profit etc. then please do add those at this stage.

When you’re happy that the top of your funnel is set, hit ‘Save Filter’:




This will allow you to return to the top of your funnel in just a few clicks. Your saved filters are stored at the top-left of the search screen for easy access:







Define Your Targets


Once you have your filters set, estimate the number of companies you aim to engage monthly, or in one larger batch bi-montly / quarterly (whatever your preferred cadence is!). When you have this figure, align this with the amount of credits needed to make those exports.

Consider rounding up to allow for new companies entering your search parameters as they submit new accounts (we update from Companies House weekly!) and new email addresses being added. You can always top up with additional pay-as-you-go credits if needed throughout the month, but the best value is to be found in the plans.

Now you have your TOF set, your outreach cadence planned out and the credits in place, it’s time to start segmenting and exporting.



Segmentation

This step is where your search expertise and specific needs come into play, but there are still some strategies you can follow to streamline this process. 


Batch Saving

Start by loading up your top-of-funnel saved search. From here, you can begin to add Smart Filters, or advanced filters, to break your larger search down into smaller batches, or segments. There are a number of ways to approach this - breaking them down into specific groups, perhaps grouped by sub-location, sub-revenue, sub-industries is the simplest method. You can also break them down using a combination of the above with a view to reaching a specific number of companies, in order to meet your monthly outreach goals. 

This is personal preference, some people will prefer to have clearly defined segments and others will be happy that as long as all are contacted, the monthly credit spend is the most important factor.

As you create these smaller batches, remember to hit that Save Filter button and give it a name that will make sense when coming back to it later! 



These batches are now segmented, saved, ready for export and outreach.  



Important note: BizCrunch automatically has “don’t show previously exported companies” switched on:





I would advise keeping this switched on, so that as you progress through your batches you’re not exporting (and contacting!) the same company twice. With that said, we never charge you for exporting the same company twice within the same year. When a company submits new accounts, they become chargeable again. Until that time, you can export them again without a credit cost. Although sending them the same outreach twice is probably not advisable!


 

Outreach


Now you have your batches in place, simply load them up and export them month by month (or whatever your preferred cadence is) and begin your outreach process. It’s highly advisable to use the data points provided in your export to personalise your campaigns, whether that’s via email or letter. Personalised subject lines in email outreach, for example, can increase open rates by as much as 50%.

When sending ‘cold’ emails to business owners there are a number of factors to consider that can improve both deliverability and response rate. We cover cold emailing for off-market deal discovery in depth in our blog. It’s definitely worth a read before embarking on any large outreach campaigns!

 

By following these steps on BizCrunch, you can efficiently manage and execute your top-of-funnel activities, ensuring a streamlined deal flow process that maximises your outreach efforts and increases the chances of making those all important acquisitions. If you’d like some guidance through this process, you’ll be happy to know that BizCrunch annual plans come with free semi-automated outreach - regular calls with a member of the team to help guide you through this process and get the most out of your BizCrunch subscription and more importantly - your outreach! 

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