Lance Hood:               So where and how do I get more information on a business than what's published?

Richard Parker:           First the seller is going to be your greatest resource. Now they're not necessarily going to tell you truth, or they may be bending the truth, but they're clearly going to be your best resource as the initial foundation from which to build your resource. So you want to ask them a barrage of questions, and the right questions. But they are going to help you understand the business and certainly provide you with enough information to continue to do your research.

                                    Next is the competition which we talked about and that those are people that you should be calling. Now obviously you have to do that discreetly, but you should be contacting the competition.

                                    And the third thing is the supply and client chain. So whatever the particular business, maybe a small distributor for example, you'd want to call suppliers that provide goods to that particular wholesaler and perhaps make like you're an interested client. You're not going to tell them you're looking to buy that particular business, but those are people that you can call. You could be calling customers of the business and again, calling them discreetly to learn more about their business which ultimately ties back to the business that you're looking at.

Lance Hood:               When it comes to calling the competition how do you do that so you get the information you want?

Richard Parker:           I'm glad you asked that because it's really easy. Let me give you an example. I'm going to pick out a business that we were looking at not too long ago.

                                    This was a distributor of industrial equipment - washing and drying equipment that caters to hotels and spas. So the big machines, 200 pound washers and dryers et cetera. And what I did and the strategy that was put into place, it's a perfect example is - first of all it's easy to find out who the competition is because very often the seller will tell you. If not it's very to find.

                                    So you call up the competition in any business and the first thing that you do is you ask to speak to a salesperson. And the reason why you do that is salespeople can't shut up. And they don't know when to stop talking. I heard a chuckle there so you've obviously lived the experience. You ask to speak to a salesperson and you play the role. You are going to be someone that is interested in buying equipment for your particular hotel or day spa or whatever it may be, and you start asking them questions related to information and pricing and how they work. How they quote you. What about their machines? What makes them better? And a whole host of questions that you would as an interested customer want to know.

                                    It could be from what their maintenance contracts are. What their warranties are? How many people that they have working for them? How long it takes to get setup? Do they help you draw plans? What brands do they carry, et cetera? During the course of this conversation this salesperson is going to think that they are going to be making a sale. That's just what they get up every morning to do.

                                    During the course of the conversation you may want to say something to them like, "Hey you know what? I've been looking at products and companies within the business. I want to tell you that the other people who I'm considering purchasing all my equipment from is Company X." That's the company you're considering buying.

                                    Now you don't tell them you're looking to buy that company. You're letting them know that they are in the running against this other firm to make a sale to you. And you would be stunned to hear what they have to say about that other company.

                                    Now there's some people who naturally are going to knock them, or they're going to give you stories that may not be necessarily true in totality, but you're going to be surprised to hear what they may have to say. One of the examples that we're using in this particular case, guess what that salesperson said to me?

                                    That person said to me, "Well the thing you have to be careful about Mr. Smith is the fact that that company is about to lose their distributorship of Brand X." And guess what? That's exactly what was happening. That's why they were selling the business.

                                    Now can you imagine you go through this whole process, you would have never known because even Brand X as a distributor would have never disclosed to you as the buyer because it was something that was happening eight months down the road. There was some consolidation in the industry and one of the - there was some duplication of distributorships. There was reporting of accounting that apparently wasn't correct. And it was just sort of known within this close industry that this company, the one we were looking to potentially acquire was going to lose the brand that contributed - I think it was about 65 or 68% of their total revenue.

                                    That's how you call the competitors. You play the role. You want to speak to a salesperson, and you want to ask good questions. You never want to disclose w that you're buying this particular business. You just want to ask cagey questions.