Thinking about buying a business? The best way to go about buying a business of your own is to employ the services of a business broker. If you have already started your business search, you may find that it is difficult to get business brokers to pay attention to you. Why is this?
For most business brokers, dealing with buyers is frustrating. Up to 90% of potential buyers who enter the market never buy anything, and a big chunk of that 90% are people who are just kicking tires and have no real desire to ever buy a business.
If you are among the 10% who really do want to buy, separating yourself from the rest will be critical in getting a deal done.
How do you as a buyer get business brokers to take you seriously?
Serious buyers ask great questions, and they ask lots of them. Buying a business is very different from buying a house because you aren’t buying aesthetics and a structure, you are buying cash flow. As such, the physical location and furnishings aren’t really important. Great buyers want to see the books and have conference calls with the owners, they don’t want to go on a walk through.
Be ready to answer questions.
Yes, personal financial information is intensely private, but when you are buying a business you are going to have to provide proof of funds and answer lots and lots of questions about your money and your work history – so just be willing and able to answer from the very beginning. Sellers don’t want to reveal proprietary information to potential buyers who haven’t proven they can afford the business and landlords/property managers won’t be willing to negotiate a new lease with buyers who don’t have the appropriate financial means.
Your business broker (if they’re a good one) has many clients and many listings to manage, so if they don’t immediately call you back – don’t call 17 times in a row. If you have shown that you are a serious buyer, you are important to your broker and they will work hard to get you the best business for you. Likewise, you also have to understand that business sellers are also small business owners, so you aren’t their top priority – the business is. Your questions will be answered, so be patient.
You might think you really want to buy a bar, when in fact a completely different business would better meet your goals for business ownership. Entering the market with a flexible mindset will be instrumental in getting you the right business. You also need to be flexible with the process of a business transaction – negotiations and appointment requests may not always go your way.
If you are ready, willing and able to buy a business – stand out from the rest by asking and answering questions, having patience and being flexible. By showing your broker and sellers that you are serious you will be well on your way to business ownership.
Do you have questions about the business transaction process? Are you wondering if the business you think you want to buy is actually the right business for you? Ask us! Please feel free to leave questions or comments here and we would be happy to help.
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