Oldies But Goodies: Reviewing Older Listings Can Pay Off!

It's a good thing that Emilio checked back to review the offering for the auto body shop that he'd noticed-and rejected-weeks before. His search on BizBen for the business he wanted to buy-either an auto body company or a car wash, maybe a tire store--had concentrated on new listings most of the time. And that's what occupied Emilio's time and attention each time he visited the site and looked over every business for sale-newly on the market-- that was in his category.

In Emilio's mind, there was no point in wading through businesses for sale listings that he'd examined and ruled out, days or weeks before. So it was a lucky decision when he figured he might just browse back into the depths of the offerings, among businesses that had been there for a while, to see if anything had changed.

There it was:  The auto body shop for sale in Orange County. It had made an impression on Emilio when he'd first seen the offering.  The size of the place was right for him and it seemed to be doing plenty of business. Besides, the photo showed a well-lit, modern facility that he would have been proud to own.

But the price! At first he'd thought about it. Maybe he should call the broker. But the seller was asking more than the company was worth, Emilio decided. At $350,000 it certainly was more than he felt he could afford.

And yet here it was, the same business, weeks later, being offered for $299,000!

The facts came out--when Emilio met with the broker--that the seller's health problem had grown worse, and yes, he acknowledged that maybe a price reduction was in order so that he could sell the business without having to wait too long.

This was a price that Emilio could manage. So, after a little negotiating, and a week spent conducting due diligence--including a meeting with the landlord--Emilio was no longer a luckless buyer 'wanna-be,' but a very happy entrepreneur, preparing to take over the business he'd discovered some time before, but never thought he'd be able to own.

SARAH'S SURPRISE

Unlike Emilio, who went back over listings he'd seen before, more out of boredom than for any other reason, Sarah scrolled through the pages of retail shops she had previously viewed because she was trying to prove a point.

"There's only one fashion accessory store for sale that looks interesting," she complained to her sister. "That's really the business I want to be in. It's what I know. It's what I want to do."

Prompted by the sister's question about the "store that looks interesting," Sarah sorted through listings she'd seen weeks before so she could illustrate that the single offering she might have wanted was no longer listed.  "When I saw it last, the status was 'in contract.' I'm sure it's gone by now."

As Sarah scrolled through the listings, her sister suddenly said: "Stop! Click on that one." It took one stroke of the mouse and up came the details concerning the very shop that Sarah had found attractive, but thought was long gone.

"Oh my gosh!  That's it!"

Sarah looked at the information. "Status: available" she said, surprised. And pleased.

"I thought it was going to be sold," Sarah said when the broker returned her frantic phone call.

"No," the broker said. "We thought it was sold weeks ago, but the buyer needed to qualify for a loan and just couldn't make it. So the shop has been back on the market for about a week now."

Sarah and her sister visited the business the following day and just ten days later, she brought her check to open escrow.

"I was trying to prove a point," Sarah told her sister.  "Am I glad I was wrong!"

STEVE'S CHANGED MIND

Viewing the listing for a vending route offered for sale, right in his community, gave Steve an idea. He had been looking at other kinds of distribution operations, but vending would be perfect. Steve figured it was a business he would like to manage and could use to provide a job for his son. The problem, as he saw it, was that the vending business listed was priced at the equivalent of six months' sales. That seemed excessive. Most other distribution companies were priced at lower multiples, in terms of gross revenues.

In his search for a business, Steve looked at a number of possibilities, including other vending companies for sale. Compared to the one he had first notice, nothing seemed too interesting and so he continued to keep the vending opportunity in mind as he investigated several different offerings.

The light finally turned on above Steve's head when he came to the realization that he was not going to find a vending route for sale-not a good one, anyway-that wasn't priced at a figure at least equal to six months' sales. Other vending outfits were priced along these lines. And when he discovered the article about pricing vending routes-right on the same site where he'd found the vending company he liked-his reading confirmed that the asking price was consistent with industry standards.

That's not all he learned. Steve found out how important it is to check back periodically to review the listings that were seen before and passed over, for one reason or another.  Things change. In Steve's case, he got an education that motivated him to move forward and buy the company he wanted.

In Sarah's case, the change was that the business she had considered sold came back on the market. For Emilio, it was a matter of a lower price.

All different circumstances. But the successful outcome in each case resulted from the simple and intelligent act of looking back over the listings that have been there awhile.

And the lesson applies to all prospective buyers: Look again, you may have missed something!

Helpful Hints For Searching & Taking Advantage Of Older/Aged Listings:

1. Utilize the Power User Function on BizBen - Save Listings to review later & followup.

2.  Put back-up offers on all interested listings with business brokers , agents, & owners.

3.  50% of all listings going into contract fall out! Stay in contact with the seller/broker.

4.  Keep in touch with brokers on all listings you are interested in even if they are in contract.

Searching & Calling On Older/Aged Listings Offer These Benefits:

1.  The seller may be more "realistic" about their selling price this time around.

2.  The owner may be willing to take a back a note and/or offer financing instead of all cash.

3.  The sellers will be much more motivated to sell after a period of time has lapsed.

Search Older/Aged Listings For Sale By:

Catagory,    Type,    County,    Advanced Search

Remember - oldies can be goodies when buying a small business!

Posted on June 29, 2008  |   Email This Blog Post   |   Print This Blog Post