Why 80% Of All California Business Buyers Never End Up Buying A Business


Why Buyers Do Not Buy Businesses

First the dreaded statistic: 80% of all buyers looking to buy a small to mid-sized business in California never end up doing so!  A shocking statistic to most buyers searching to buy a California small business.

Helpful hints and strategies below such as understanding how California business brokers and agents actually operate, keeping tabs on all the new listings that come to market, making sure you sign up for FREE Email Instant Alerts of new/refreshed postings that match your search criteria, and submitting a Business Wanted To Buy Posting that is emailed to all brokers, agents, owners who have businesses for sale that match your criteria (your posting is also featured online in all relevant areas on BizBen as well). Since I consult daily with many potential business buyers, I know what works and what tactics business buyers should avoid to not only waste time, but also to not lose any money on needless practices and resources.

WHAT MOST CALIFORNIA BUSINESS BUYERS DON'T KNOW - BUT SHOULD ABOUT THE BUYING PROCESS

1. Most buyers of California small to mid-sized businesses don't realize that 70% or more of California business brokers and agents don't cooperate on their (business for sale) listings - meaning they don't share their information with other brokers and agents either intentionally or unintentionally by not advertising or promoting their listing(s) to other California business brokers, agents, and intermediaries.

2. Most buyers call only a few brokers or agents thinking/hoping the broker will "find" or "search" for them and find the ideal business to purchase. Most business brokers and agents are so busy trying to sell their own set of listings that they rarely have the spare time to do non-paid searches for a buyer who may not end up buying a business.

3. 60% of all California small businesses for sale are not advertised or marketed - they are "pocket listings", "unadvertised listings" - these are listings that business brokers and agents don't have listed but know about because of their daily dealings with small business owners in California who want to sell but will not give a contract or written listing to a broker or an agent. They will sell if the broker or agent brings them a "serious buyer". What this means to you as a serious business buyer is that you have to get the word out to as many California business brokers and agents as possible to widen your "comprehensive search process".

4. In all business brokers directories only the main broker is listed - in most instances there are more (sometimes up to 5 to 25+ agents) that aren't listed but have great "pocket" or "unadvertised listings" that others in the office don't know about - you need to reach all these business brokers & agents directly because of #3 listed above.

STEPS ALL SERIOUS CALIFORNIA BUSINESS BUYERS SHOULD DO TO BE SUCCESSFUL:

1.  If you know what types or locations of businesses you are searching for you need to post and keep posted at all times a Business Wanted To Buy Announcement Posting or utilizing the BizBen Business Buyer ProBuy Program and get the word out to as many California business brokers, agents, intermediaries, and owners as possible - you need to be highly visible - this step provides that!

2. You need to scan the new and refreshed business listings for sale  (save all interesting listings to your BizBen My Admin section when you are logged into your FREE BizBen Account) posted everyday at BizBen. On average over 400 new and refreshed postings / listings are posted daily and in many instances offers and letters of intent come quick on the more popular new listings - don't miss out on these - check the new listings daily (register for Instant Email Alerts - customize these to types and areas of businesses wanted to buy) on BizBen (but don't forget to search on all older posted listings too and "Save" them to your BizBen MyAdmin section - after you login to BizBen).

3. Sign up for a FREE BizBen User Account to receive new listings/postings by Custom Instant Email Alerts and Daily Email Reports of all new and refreshed postings / listings posted that match your search and buying criteria. Make sure you put @bizben.com in your "Safe List" in your email program/software so these Email Alerts / Reports don't end up in your spam or junk folder - you do not want to miss out on any great new listings/postings posted and emailed to you.

4. Contact as many of the business brokers and agents listed in the California Business Broker Directory on BizBen with your request (let these brokers and agents know you saw their info in BizBen) - what types, locations, prices, adjusted net income - what you want in your ideal business you are searching for. Make sure you get them a Business Buyer Profile / Personal Financial Statement and a Non-Disclosure on any of their listings they may be selling (email these back with their NDA/Confidentiality Agreements). Stay in touch will all of these business brokers and agents on a consistent basis - see step #1 above - post a Business Wanted Announcement - the buyers who are more active and visible tend to be the ones who get the better businesses being sold!

5. When contacting a seller/owner, broker, or agent about a business for sale on BizBen make sure you phone, email and text the contact about the listing - in other words do all three actions to show them you are serious about their business for sale - remember - phone, text, & email. Don't rely on email alone or just a phone call - to many emails these days end up in the junk folder for one reason or another - don't let this reason void your chances of not buying a business - remember to call and text as well (also please let the seller or broker/agent know you saw their listing on BizBen!). If a broker or owner doesn't return your call / email / text keep trying them daily until you get results!

6. Make back-up offers on all businesses for sale that you are highly interested in that may be in escrow or contract. Show the broker/agent or seller that you are interested and willing to move forward if the current buyer starts lagging or terminates their purchase agreement. 50% of all California deals fall out for one reason or another - I have seen many buyers with back-up offers ultimately be the "winning" buyer on a deal when using this strategy.

7. Make sure you have your "team" in place and ready to go - transactional attorney (review of purchase agreement contract or LOI, lease agreement, etc.) phase l and phase ll due diligence advisor, escrow/bulk sale service, business purchase financing advisor (get professionally pre-qualified before your search process begins), industry specific consultants, etc. If you aren't ready for a transaction should a business become available for sale you will probably be relegated to a back-up position - bottom-line be ready with your "team" of advisors.

8. If you really like a business being sold - make an offer - "pull the trigger" - too many potential business buyers are tentative or too analytical and wait too long to make an offer (they lose out on deals because they take too long to produce a purchase agreement or LOI). If you are interested in a business - particularly a business being sold that is high in demand by other buyers - put in a non-binding LOI (letter of intent) to "lock-out" other potential buyers until you can fully investigate the business and know if you want to fully commit with a detailed business purchase agreement.

If you follow the above steps - and I mean all of them you will be successful in buying the best California small to mid-sized business that match your personal needs and search criteria!

If you need assistance with any of these steps above or are interested in the BizBen ProBuy Program please phone us at 888-212-4747 (if you happen to get our voicemail - please leave a detailed message and we will phone you back promptly).

Categories: BizBen Blog Contributor, Buying A Business, How To Buy A Business

Contributor:

Peter Siegel, MBA
Areas Served: All Of California
Phone:  925-785-3118 Cell, 925-785-3118 Text
Founder Of BizBen.com (since 1994). I am the Lead Advisor for the ProSell, ProBuy, & ProIntermediary Programs. I consult daily with buyers, sellers, and brokers daily about buying and selling California small to mid-sized businesses. Call 925-785-3118.





  Helpful Resources To Assist In Selling And Buying California Businesses
William F. Ziprick, Attorney: Legal Services For Buyers And Sellers

Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.

Brad Steinberg, Business Broker: Laundromat Specialist

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

Shalonda Chappel: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Buyer Beware: Does A Company's Culture Effect The Sale Of A Small Business?

When purchasing a small to mid-sized CA business, there are a many items to evaluate. One area that is often overlooked is the business's office culture. Peter Siegel, MBA with BizBen discusses with business buyers the importance of understanding how the business "feels" on a day-to-day basis.

Computing All Add Backs: Defining Adjusted Net Income When Buying A Business

The use of add backs & adjusted net income is common among sellers of businesses when showing their financial information/performance. But buyers are cautioned to review financials and tax returns/documents closely. Peter Siegel, MBA with BizBen (ProBuy & ProSell Advisor, Lead Facilitator) explains.

5 Myths About Selling A California Business: Best Tips For Sellers & Brokers

Peter Siegel, MBA (at 925-785-3118) - BizBen Director discusses myths associated with the process of selling a business and some of them can actually cause deals to fall through. Don't let your sale be comprised, be aware of these common misconceptions related to the process of selling a business.

Considering Hiring A Business Broker? Ask These Questions First, Then Decide

The key to finding the ideal business broker or agent and selling a small business is asking the right questions and getting the right answers back! Peter Siegel, MBA with BizBen & several top business brokers and agents in California (ProIntermediaries) contribute to this topic to assist sellers.

Business Purchase Financing - 3 Things You Need To Know Now For Success

Looking to buy a small business? There is good news regarding business purchase financing. More financial institutions are coming back into the market with business purchase financing. After years of being selective many lenders are more open to financing deals. Peter Siegel, MBA covers this topic.

How Many Listings Is Too Many For One Broker To Handle? Is It 5? 10? 20?

Peter Siegel, MBA in this Vlog/Podcast discusses how many listings is too many for one business broker to handle at one time. Is it 5 is it 20? I recently had a coaching call with one of my BizBen broker clients who asked that question this week. There are many factors that go into the answer.

Who Really Represents The Business Buyer In A Deal? Does Dual Agency Work?

Who really represents the buyer? The selling broker or agent through dual agency? Many brokers and agents weigh in on this Discussion on BizBen. Bottom line is all business buyers need to know who really represents them and has their best interest at heart when seeking and negotiating on deals.

How To Determine Whether The Buyer For Your Business For Sale Is Sincere

A problem owners encounter when offering a CA business for sale is that not all so-called business buyers are qualified to make the purchase. It's frustrating and costly to waste time showing non-qualified buyers the business. Here are ways to identify time wasters so the focus is on real buyers.


Escrow Services Diane Boudreau-Tschetter
Veld Group Business Brokerage Los Angeles County
Jim Saxton SF Liquor Licenses
Tim Cunha Business Brokerage
Facebook
Twitter
Linkedin
Vlogs and Podcasts
BizBen ProBuy Program
BizBen Blogs And Articles
Business For Sale California Stats
Instant Email Alerts On BizBen
BizBen ProSell Program

BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved



Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Selling My Small Business: What Items Should I Have Ready To Be Successf...
Read More News
Thinking Of Selling My Business: What Factors Create Value And Drive Pri...
Read More News