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.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence
Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.
|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.
|Shalonda Chappel-Pilgram: 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.
|Chris Seaman, Business Broker: Southern California
Founded in 1994, First Choice Business Brokers has accelerated to become one of the most successful Business Sales Organizations in the world. Our team of agents have gone through extensive training to become experts in the field of business brokerage. Call Chris at 858-578-4111 for more info.
|Mani Singh CBB, M&AMI, Business Broker, Southern California
I have successfully represented clients sell & acquire multitude of businesses ranging from Gas Stations, Liquor Stores, Markets, Super Markets, Smoke Shops, Postal Stores, Restaurants, General Retail, Auto and Construction related. Phone me for assistance with selling or buying at 951-296-7646 Cell
|Mike Hurrell, Broker: Coin & Card Laundry Specialist Brokerage
Providencia Properties Inc in association with Golden State Laundry Systems is a full service Coin Laundry Real Estate Broker. At GSLS you will receive personalized attention from our professional staff of coin laundry experts. To sell or buy a Southern CA laundromat call Mike at 310-223-2240 X209.
|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.
|Related Articles, Events, Blog Posts, Discussions, Videos, Interviews|
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There are a handful of key asset categories in allocating or breaking down the purchase price allocation of a California business sale. Allocation is required to complete the transaction. In this blog post Lee Petsas (Orange County Business Broker) at 714-363-0440 covers asset allocation classes.
|Buying A Business With Partners Or Family Members: Pros And Cons
Buying a business with a partner/partners, family members can make one think twice about ever doing it twice! However in this BizBen Discussion Post Joe Ranieri (Orange County Business Broker at 714-292-5448) chats about identifying roles, defining goals, attorney visits, and other relating issues.
|Live Workshop: How to Find Profitable Businesses For Sale Not On The Market
Live Workshop For Business Buyers: Find Small Businesses Possible For Sale Not On The Market. This Workshop Is In Southern California. Every Month On Saturdays - 1:30 PM to 4:30 PM. Call 805-428-2063 to RSVP. Willard Michlin, CPA will be presenting this workshop. Click On Link For Schedule & Times.
|Attorney Specialist Shares Escrow Instruction Tips When Buying A Business
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|What Steps Do I Take When Closing A Business That Doesn't Sell And I Close?
Every business broker knows that a listing taken is not a listing sold, in fact the ratio of listed vs. sold could be discouraging if you really thought about it. Joe Ranieri (Orange County Business Broker) discusses what you should do if you finally have to close the doors and call it quits.
|Going Behind A Brokers Back: How Does A Broker Protect Themself?
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