How to Seek for Business Sellers
Mar 2, 2018 // By:admin // No Comment
Looking for owners of business for sale may be quite challenging. As much as possible, sellers do not explicitly announce the sale of their business to avoid causing ire among customers and employees. Even investment bankers have limited knowledge on the array of businesses available for acquisition. They just usually wait for the right buyer to come. Some owners who own small business just contact potential buyers directly to present their offer.
But one strategy that can be applied in order to look for businesses open for purchase is the “call-mail-call”. You may get a list of owners with businesses in the particular industry you’re targeting and inquire if they know someone who is showing his/ her desire to put his/ her business on sale. They may not give you a favorable response immediately so you may just send a letter with your business card as attachment as your follow-up, two weeks later. Finally, make the call and ask for potential business sellers that they may know. This will give them the impression that you are indeed interested to invest in a business.
You may also browse through printed classified ads or trade publication or read articles online. You may get to know some of the business owners who are more likely to retire soon. They might not have shown their intention yet probably because they still don’t know their action plans for their existing business but the possibility is there.
It also pays to build connections with professionals involved in business selling transactions like investment bankers, financing companies, and brokers. But it’s much helpful if you widen your network with actual entrepreneurs than hiring mediators for the transaction.
But you may also take your chances online. Some owners openly rely on the internet for the sale of their business for faster and seamless transaction. According to Mike Handelsman, General Manager of BizBuySell, owners must take ample time before they decide to finally put the business on sale. By the time that the business is already open for acquisition, the owner must be able to disclose the financial status of the company (that includes incurred costs and historical sales performance), as well as other information that have to do with the company’s growth. Online marketplaces for businesses may also help the owners determine the realistic price for their business based on similar businesses posted, location, and declared income and cash flow. It also pays to know which types of businesses are sold easily. According to Handelsman, based on trend, businesses in the food industry like restaurants and service-oriented companies are frequently searched for and purchased In making an online listing, owners must make sure that they give the right details about their business. The owner must know the amount and type of information to disclose so as to preserve the business’ confidentiality. Useful tip that they can use for the listing is to provide general information that can give the prospective buyers a glimpse of the business. Let the buyer know the reason for selling to avoid skepticism on their end. Once the transaction becomes progressive, the owner may share further details but must make sure that the buyer must sign a confidentiality agreement. Once the listing is posted online, sellers might notice the usual inquiries that they receive from potential buyers; this will help them determine which additional information is needed.
There are widely-known online marketplaces like Businesses Buy Sell that business owners may use as platform for the sale of their businesses.