Most buyers think that they have seen everything that there is to see when looking to buy a business. The truth is there is a lot of information out there and it’s easy to become confused about what you’ve seen already and what you haven’t. The first thing I suggest when looking for a business is for you to keep a journal about the listings that you’ve inquired about already and what your thoughts were at the time that you saw the business.
It is 100% not true that a business that’s been on the market a long time is not a good business. One of the best listings I ever had, took me 2.5 years to sell!! That business was one of the most profitable businesses I ever listed, but selling businesses is a lot like match making. You’ll find the right person when the right person shows up and not a minute sooner.
There are so many reasons why a business doesn’t sell right away. These days the economic news influences the buyer’s mood so substantially; it could just be a case of bad timing. Listings that require financing, or substantial layout of cash, have suffered tremendously in the last 3 years. This is not the fault of the business, banks were not lending for many months.
Some businesses have a unique skill that required and so the pool of interested buyers is smaller but that doesn’t make it a bad business. A good example of this type of business would be businesses that require a certain type of license, like a construction company. Hair salons can take time too, ideally a operator would be a stylist so it is a narrow pool of buyers and we must wait for the right person with adequate funds to come along for that type of business.
In some cases the business is fine but the seller is unrealistic and he’s priced the business too high. After the listings on the market for months with no movement he might consider a lower offer at this point. We would hope that his broker would be able to get him to lower the price for his business but if not it never hurts to try. Some buyers are very sensitive to not insulting the seller with a much lower offer and although this can be case, the old saying “you never know until you try” comes to mind.
As a broker who often represents both sides (as a dual agent), I will never tell a buyer what to offer. However, if the seller has recently rejected a similar offer or if the seller has given me specific instructions that he will not go below a certain number, I will pass that information on. In every other case I believe that if you feel that it is the right business for you, you should make every attempt possible to buy the business for what you think is a fair offer and communicate through your broker that there is no disrespect intended, it’s just business.
So if you’ve been looking for a business for a while, go back start with fresh eyes. You never what kind a gem has just been waiting on the ocean floor for someone to find it.
About The Author: Christina Lazuric is an Orange County Business Broker who shares her broker experiences with BizBen readers and has had varied direct small business experience in the past but now assists small business owners sell their business and offers business buyers find their dream business to operate. Phone Christina direct at 949-257-7823.
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The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups.
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Cheryl's a restaurant business broker, over 25 years in the bar and restaurant industry coupled with a J.D. Cheryl works tirelessly to create successful strategies and effective negotiations for those who wish to purchase a new or sell an existing bar, restaurant, cafe, or night club. 415-309-2722
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If your business involves alcoholic beverage sales, we can help. Obtaining a liquor license transfer or selling a business with a license in California does not have to be a frustrating and overwhelming process. We have procured thousands of licenses for our clients.
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