Where to find a business to purchase?

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thethinker
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Where to find a business to purchase?

Post by thethinker » Sat Jan 16, 2016 1:01 am

Are there any relatable sites to search for existing businesses for sale? I'm in the market and while a startup is possible, I'd like to see what's out there.

Does anyone else on this site own a business in addition to their 'day job'?

Daryl
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Re: Where to find a business to purchase?

Post by Daryl » Sat Jan 16, 2016 6:35 am

Personally, I'm invested in several (thousand) business through the Total Stock Market Index and other products that track the S&P 500. In addition to this equity stake, I'm providing financing for many companies and the US government through the Total Bond Market Index (and I-Bonds).

This approach has two benefits for me:
- My personal portfolio performance isn't tied to the outcome of any one business. Through the products mentioned above, I'm sure that I've owned several companies that went bankrupt. The performance of other, stronger companies more than offset that last year.
- Managing all of these companies (and the US Government) is easy. So easy that I often make more money when I'm sleeping than when I'm awake! I've hired world-class CEOs to lead each of the companies that I own (again, just a minority stake through my ownership of the Total Stock Market Index). Each month I receive a steady stream of interest payments and the companies I own regularly send me my share of the corporate earnings (dividends).

This approach works for me. YMMV.

cheesepep
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Re: Where to find a business to purchase?

Post by cheesepep » Sat Jan 16, 2016 6:44 am

I don't have any to recommend but I would love to own the local bakery to me for historical reasons. I used to go there as a kid and have fond memories of that place. I know that that isn't good business policy, but it is just my dream!

Hunky-dory
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Re: Where to find a business to purchase?

Post by Hunky-dory » Sat Jan 16, 2016 7:50 am

Out of curiosity I googled "best website for buying businesses" and visited a few sites. Pretty interesting, but I have no idea if any of them are any good. I would be curious to hear if anyone has bought a business on-line. I work a fair amount with folks who buy businesses and they usually find them through professional networks, cold calling or brokers.

J295
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Re: Where to find a business to purchase?

Post by J295 » Sat Jan 16, 2016 9:52 am

I'm a (mostly) retired lawyer and am familiar with various purchase and sale transactions over the years. Personally, I'm not a big fan of opportunities that are presented through business brokers, and instead prefer the word of mouth opportunities (and including someone approaching an existing business and inquiring on whether they'd like to sell).

I would not discourage anyone from exploring owning and running a business, but I will share that it is very hard work that has many implications to keep in mind (financial, relationship, etc.).

Best of luck, and if you land on something report back as it would be interesting to know how things progress for you.

jyp012
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Re: Where to find a business to purchase?

Post by jyp012 » Sat Jan 16, 2016 10:05 am

I know a lot of people who have purchased their business through bizbuysell.com.

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Sat Jan 16, 2016 6:43 pm

jyp012 wrote:I know a lot of people who have purchased their business through bizbuysell.com.


Thank you

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Sat Jan 16, 2016 6:44 pm

Daryl wrote:Personally, I'm invested in several (thousand) business through the Total Stock Market Index and other products that track the S&P 500.


Wow that's awesome! So you don't work at all?? Just invest in the index fund and that's it?? I'm jealous! Good for you!

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Qtman
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Re: Where to find a business to purchase?

Post by Qtman » Sat Jan 16, 2016 7:04 pm

thethinker wrote:Are there any relatable sites to search for existing businesses for sale? I'm in the market and while a startup is possible, I'd like to see what's out there.

Does anyone else on this site own a business in addition to their 'day job'?


We do some rental real estate.
Don’t wear yourself out trying to get rich; be wise enough to control yourself. | Wealth can vanish in the wink of an eye. It can seem to grow wings and fly away | like an eagle. - King Solomon

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Sun Jan 17, 2016 10:57 am

Thanks, I was asking more about the purchase of a business on this forum, but rental properties are good too

Rayandron
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Re: Where to find a business to purchase?

Post by Rayandron » Sun Jan 17, 2016 11:52 am

There are several websites like bizbuysell.com where you can search businesses that are for sale in a variety of industries. There are also specialized websites that focus on different types of business. One example would be www.empireflippers.com, which specializes in online businesses and websites.

Another option would be for you to contact local business brokers and ask about what businesses that are for sale that they're working with to find buyers. If you go this route, try to work with Certified Business Intermediaries (CBIs), which you can find on the International Business Brokers Association (IBBA website).

The business I run is currently for sale via a broker and is also posted to a number of website forums.

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Mon Jan 18, 2016 7:46 am

Rayandron wrote:The business I run is currently for sale via a broker and is also posted to a number of website forums.


Thank you for the post.

Do brokers typically have websites for the public to view? Or must I hire a broker to be able to find those businesses?

TerryDMillerMBA
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Re: Where to find a business to purchase?

Post by TerryDMillerMBA » Mon Jan 18, 2016 6:10 pm

No matter what route you go with, always do DUE DILIGENCE. Even if you were to hire a consultant to look into these things for you, you still would be forewarned to do some "homework" yourself.

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unclescrooge
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Re: Where to find a business to purchase?

Post by unclescrooge » Mon Jan 18, 2016 7:25 pm

Be careful of buying businesses while you are still working.

I know of three independent instances where people with fulltime jobs bought a baskin robbins, a cold stone creamery and a frozen yogurt shop. They all had employee issues, were unable to turn a profit and sold at a loss a couple of years later. For one unfortunate couple, it also destroyed their marriage (but who's knows, maybe that would've happened anyway).

Rayandron
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Re: Where to find a business to purchase?

Post by Rayandron » Mon Jan 18, 2016 11:33 pm

thethinker wrote:
Rayandron wrote:The business I run is currently for sale via a broker and is also posted to a number of website forums.


Thank you for the post.

Do brokers typically have websites for the public to view? Or must I hire a broker to be able to find those businesses?


Most brokers do have a website, but the ones I did research on did not list any of their currently available businesses on their own personal site, probably because their personal sites don't enough web traffic to justify the effort compared to listing the business on a web marketplace.

You should not need to hire a broker to learn what businesses they have for sale, but be prepared for them to ask for you to provide financial information to prove that you have the resources necessary to buy the size of businesses they have for sale. Otherwise they won't want to spend time with you because they're well aware that most people "interested in buying a business" never actually pull the trigger and do so.

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Tue Jan 19, 2016 7:15 am

TerryDMillerMBA wrote:No matter what route you go with, always do DUE DILIGENCE.


Great point!

PlayingLife
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Re: Where to find a business to purchase?

Post by PlayingLife » Tue Jan 19, 2016 7:28 am

http://www.franchising.com/

That's a good site for looking into franchises...I took an MBA course that gave me several great links but unfortunately I'm traveling with only my work computer at the moment. Definitely do your due diligence and make sure you're brushed up on your finance enough where you can understand all the financial reports you are going to have to read.

I always find this book to be a good and simple refresher...

Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Tue Jan 19, 2016 9:52 am

Rayandron wrote:
thethinker wrote:
Rayandron wrote:The business I run is currently for sale via a broker and is also posted to a number of website forums.


Thank you for the post.

Do brokers typically have websites for the public to view? Or must I hire a broker to be able to find those businesses?


Most brokers do have a website, but the ones I did research on did not list any of their currently available businesses on their own personal site, probably because their personal sites don't enough web traffic to justify the effort compared to listing the business on a web marketplace.

You should not need to hire a broker to learn what businesses they have for sale, but be prepared for them to ask for you to provide financial information to prove that you have the resources necessary to buy the size of businesses they have for sale. Otherwise they won't want to spend time with you because they're well aware that most people "interested in buying a business" never actually pull the trigger and do so.


Thanks for following up

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Tue Jan 19, 2016 12:02 pm

PlayingLife wrote:http://www.franchising.com/

Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports


Thank you

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TNL
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Re: Where to find a business to purchase?

Post by TNL » Tue Jan 19, 2016 12:43 pm

unclescrooge wrote:Be careful of buying businesses while you are still working.

I know of three independent instances where people with fulltime jobs bought a baskin robbins, a cold stone creamery and a frozen yogurt shop. They all had employee issues, were unable to turn a profit and sold at a loss a couple of years later. For one unfortunate couple, it also destroyed their marriage (but who's knows, maybe that would've happened anyway).


Totally true. I also really would recommend only buying a business in an industry that you yourself have some knowledge and work experience in. We were approached by a friend a few years ago to be a part owner of a salon and day spa near our home. The cost wasn't high and we considered doing it. However, neither my spouse nor I have any experience or training in that field (we are not licensed estheticians, or hair stylists, or makeup artists, or whatever) and I have only heard horror stories about the staffing and marketing problems associated with salons. So we passed. I think it was the right decision for us. We might have made some money but the dollars per hour would not have been worth it.

What I would consider buying would be a one-third interest or a one half interest in a coffee stand. My area is a growing area, a drive thru coffee stand would make a lot of money, and I have some knowledge in this area. If anyone does one of these on the side, I would be interested in talking to you in a PM.

dirtytough
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Re: Where to find a business to purchase?

Post by dirtytough » Tue Jan 19, 2016 1:01 pm

TNL wrote:
What I would consider buying would be a one-third interest or a one half interest in a coffee stand. My area is a growing area, a drive thru coffee stand would make a lot of money, and I have some knowledge in this area. If anyone does one of these on the side, I would be interested in talking to you in a PM.


I am partners in a little coffee stand. Feel free to PM me anytime.

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Wed Jan 20, 2016 10:12 am

TNL wrote:
unclescrooge wrote:Be careful of buying businesses while you are still working.

I know of three independent instances where people with fulltime jobs bought a baskin robbins, a cold stone creamery and a frozen yogurt shop. They all had employee issues, were unable to turn a profit and sold at a loss a couple of years later. For one unfortunate couple, it also destroyed their marriage (but who's knows, maybe that would've happened anyway).


Totally true. I also really would recommend only buying a business in an industry that you yourself have some knowledge and work experience in.

Great words of wisdom

Lawyerjoe
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Re: Where to find a business to purchase?

Post by Lawyerjoe » Wed Jan 20, 2016 10:26 am

Want a good deal on a business? Find a lawyer who specializes in bankruptcies and learn how to buy a business after the debt is wiped out through the bankruptcy court process.

Spirit Rider
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Re: Where to find a business to purchase?

Post by Spirit Rider » Wed Jan 20, 2016 11:56 am

thethinker wrote:
TNL wrote:
unclescrooge wrote:Be careful of buying businesses while you are still working.

I know of three independent instances where people with fulltime jobs bought a baskin robbins, a cold stone creamery and a frozen yogurt shop. They all had employee issues, were unable to turn a profit and sold at a loss a couple of years later. For one unfortunate couple, it also destroyed their marriage (but who's knows, maybe that would've happened anyway).

Totally true. I also really would recommend only buying a business in an industry that you yourself have some knowledge and work experience in.

Great words of wisdom

To expand on this, when you purchase any small business that has the public as customers (food, retail, etc...), you are buying a job more than a business. To be successful almost always requires major commitment of your time.

Also, the success of buying a business is highly correlated to the new owner's business experience and/or experience in that particular field. When I say experience, being a customer does not equate to experience.

While some people can buy a business as a total newbie and be successful, the more experience you have, the higher your probability of success.

Vilgan
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Re: Where to find a business to purchase?

Post by Vilgan » Wed Jan 20, 2016 1:33 pm

The people that I've known that have done this successfully had a few key experiences:

1) Due diligence x10! Usual experience seems to be doing a lot of working researching potential purchases only to eventually find hidden things that make it very unappealing. The one I'm most familiar with the buyer eventually had a great success but it was the 4th business he looked at after spending 9 months of due diligence time and money on potential purchases that fell apart in due diligence.
2) Have some sort of experience in either the industry or running a business. You can learn one or the other or both, but trying to learn both in your brand new business can be scary. Businesses fail all the time.
3) It will become (in most cases) your full time job. After you have a feel for things, you can make it a full time job that's only 20 hours a week, but that typically won't be the case for the first 6 months. A good business purchase will have so much cash flow though that a main full time job should be irrelevant.

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Thu Jan 21, 2016 6:37 am

Spirit Rider wrote:While some people can buy a business as a total newbie and be successful, the more experience you have, the higher your probability of success.


I agree with you. It's one of those funny scenarios though: How can one have experience needed for a successful business without first having no experience at some point.

Spirit Rider
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Re: Where to find a business to purchase?

Post by Spirit Rider » Thu Jan 21, 2016 12:22 pm

thethinker wrote:
Spirit Rider wrote:While some people can buy a business as a total newbie and be successful, the more experience you have, the higher your probability of success.

I agree with you. It's one of those funny scenarios though: How can one have experience needed for a successful business without first having no experience at some point.

You have experience in the financial, employee (HR), purchasing, etc.. aspects of running a business. You obtain these by having applicable experience in a small to medium sized business. Also, experience being an experienced employee or even better a manager in the specific field. For example, you were the manager of a diner and then buy a fast food franchise. Much of the knowledge will transfer. However, a car salesman buying a bowling alley, not so much.

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whatusername?
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Re: Where to find a business to purchase?

Post by whatusername? » Thu Jan 21, 2016 12:55 pm

thethinker wrote:
Daryl wrote:Personally, I'm invested in several (thousand) business through the Total Stock Market Index and other products that track the S&P 500.


Wow that's awesome! So you don't work at all?? Just invest in the index fund and that's it?? I'm jealous! Good for you!


What makes you equate owning/investing in a business with "not work(ing) at all"? In my experience, most of the successful (majority) owners I have met work quite a bit more than they would if otherwise "just" an employee... If you don't want to work in/for a business you own, then TSM is actually a pretty good suggestion (and one that I assume you meant to treat sarcastically). Otherwise you're concentrating diversity risk pretty dramatically.

(Put another way, a lot of doctors have lost a lost of money owning restaurants over the years).

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Thu Jan 21, 2016 2:52 pm

whatusername? wrote:
thethinker wrote:
Daryl wrote:Personally, I'm invested in several (thousand) business through the Total Stock Market Index and other products that track the S&P 500.


Wow that's awesome! So you don't work at all?? Just invest in the index fund and that's it?? I'm jealous! Good for you!


What makes you equate owning/investing in a business with "not work(ing) at all"? In my experience, most of the successful (majority) owners I have met work quite a bit more than they would if otherwise "just" an employee... If you don't want to work in/for a business you own, then TSM is actually a pretty good suggestion (and one that I assume you meant to treat sarcastically). Otherwise you're concentrating diversity risk pretty dramatically.

(Put another way, a lot of doctors have lost a lost of money owning restaurants over the years).


Daryl made it sound (in his first post) as though he doesn't have to work and just lives off his TSM investment. Maybe he didn't mean that, I could be mistaken. I was impressed if he lived off his index funds and would love to be in that position pre mid 60s

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Thu Jan 21, 2016 7:54 pm

Vilgan wrote:The people that I've known that have done this successfully had a few key experiences:

1) Due diligence x10! Usual experience seems to be doing a lot of working researching potential purchases only to eventually find hidden things that make it very unappealing. The one I'm most familiar with the buyer eventually had a great success but it was the 4th business he looked at after spending 9 months of due diligence time and money on potential purchases that fell apart in due diligence.
2) Have some sort of experience in either the industry or running a business. You can learn one or the other or both, but trying to learn both in your brand new business can be scary. Businesses fail all the time.
3) It will become (in most cases) your full time job. After you have a feel for things, you can make it a full time job that's only 20 hours a week, but that typically won't be the case for the first 6 months. A good business purchase will have so much cash flow though that a main full time job should be irrelevant.


Great list!

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Fri Jan 22, 2016 7:21 pm

Spirit Rider wrote:
thethinker wrote:
Spirit Rider wrote:While some people can buy a business as a total newbie and be successful, the more experience you have, the higher your probability of success.

I agree with you. It's one of those funny scenarios though: How can one have experience needed for a successful business without first having no experience at some point.

You have experience in the financial, employee (HR), purchasing, etc.. aspects of running a business. You obtain these by having applicable experience in a small to medium sized business. Also, experience being an experienced employee or even better a manager in the specific field. For example, you were the manager of a diner and then buy a fast food franchise. Much of the knowledge will transfer. However, a car salesman buying a bowling alley, not so much.


A very good point. Likely that someone who makes money in one venue (ex: lawyer) can't easily make money when investing their law profits to start a bowling alley. However there are scenarios where that one person can make those two business work, wouldn't you agree? Assuming it's not luck, how could that be possible? Must the lawyer have superior skills at understanding the accounting books of the bowling alley and understanding future financial decisions? I'd be interested in your thoughts.

Ron
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Re: Where to find a business to purchase?

Post by Ron » Fri Jan 22, 2016 8:25 pm

cheesepep wrote:I don't have any to recommend but I would love to own the local bakery to me for historical reasons. I used to go there as a kid and have fond memories of that place. I know that that isn't good business policy, but it is just my dream!

You could be rolling in dough! :oops: ...

- Ron

Immafreak
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Re: Where to find a business to purchase?

Post by Immafreak » Sat Jan 23, 2016 1:07 am

I have bought a donut and coffee shop and a flower shop through bizbuysell. I had no experience in the industries prior into getting into the business. Some things i've learned in the industries I've been in.

1) I agree that knowing the industry beforehand is advantageous.If you don't, then network with your suppliers and they will help you learn your industry better and faster than trying to figure it out yourself. Get mentorship from other non competing businesses. Join your city's chamber of commerce.
2) Being a small business requires a lot of endurance, self-motivations, and grit.
3) You work hard and longer than being employed.
4) Its hard money
5) Do your due diligence, ignore the broker (they represent themselves and the seller often)
6) Anything the seller tells you, divide the exaggerations by at least 20% (i.e, "i only work X amount of hours" "I have X amount of customers")
7) Have a supportive family. It helps if your spouse works...
8) Never get comfortable with your progress. Always keep learning. Most mom and pops don't.
9) Don't try to compete with big box stores.
10) When business gets rough and you want to quit, remember why you wanted to do it in the first place.

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Sat Jan 23, 2016 11:42 am

Ron wrote:
cheesepep wrote:I don't have any to recommend but I would love to own the local bakery to me for historical reasons. I used to go there as a kid and have fond memories of that place. I know that that isn't good business policy, but it is just my dream!

You could be rolling in dough! :oops: ...

- Ron


And The Pun Award goes to....

stillnesssage
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Re: Where to find a business to purchase?

Post by stillnesssage » Sat Jan 23, 2016 2:04 pm

In a previous life I taught an online class entitled "Buy a Business--Nothing down. Here is the advice from the lesson on finding businesses to buy:

Forget business brokers, your going to see a lot of garbage. You're not their long lost relative and they are likely to only show you the stuff that has been sitting on the shelf that has been ignored by everyone else. You're not going to be privileged to see the really good stuff . . . they show those businesses only to their institutional buddies. Want ads are even worse as they are filled with overpriced, under-performing businesses that are too cheap to pay a brokerage fee.

In order to find the best businesses to buy you have to do your own legwork. The very cream of the crop exists in the hidden market. Finding the hidden market involves some digging and homework, but the net result will be that you are working on fresh sellers that are not likely to be available in the open market. It is a sure fire approach that produces great results, here is how it works:

Identify reliable sources of names — List brokers seem to exist everywhere you look. The Internet is full of discount list brokers, but my experience is that you get what you pay for. Be prepared to pay in the neighborhood of 30¢ for each listing that you buy. Here are some great sources for buying lists.

The very best source — Every business group has a trade association. In my experience these are your best sources for contacts. Trade association lists can be purchased directly from the association, and many actually publish membership lists on their Web sites. If you have software such as e-grabber you can capture your own names for free. An association list is almost always up-to-date and the most accurate.

Finding a trade association — Just to use a good search engine (go to the Classroom External Links) and do a search with the word "association" and your target industry name i.e.: "association florists".

List Brokers — There are several good list brokers who I find to be very reliable.

Dunn & Bradstreet's Zapdata — Click Here.

American Business Lists — Click Here.

Other free lists — On a tight budget and can't afford to pay a list broker? A trip to any big library will provide you with lots of leads. You will be amazed at how many great lists are available. This is not the time to be shy, get help from the librarians at the reference desk. You will be amazed at how quickly they can find you exactly what you are looking for, in just a few minutes you will have a pile of:

Directories — Dunn & Bradstreet listings, chamber of commerce directories, trade Association membership lists, manufacturer registers and local business publications all are sources of good names.

SEND OUT A LETTER

You will gain great psychological advantage if you can get the sellers to call you. One sure way to make that happen is to do a direct mailing.

The content of the letter you send is critical if your goal is to get the sellers to call you. Down through the years, I have participated in many of these mailings. By trial and error I have identified the critical elements of an approach letter that gets the results I am looking for. Here are the must have key ingredients of the letter:

Catch phrase — "I understand from industry sources that you are a fine manufacturer of widgets."

Statement of interest — "I am interested in buying a business in your field".

Establish credibility — "I am a cash buyer."

Call for action — "If you have an interest in selling your company please call or write . . . "

Keep the letter brief and all on one side. A 2%-5% response rate would be exceptional. If your list is very small (less than 50) you might want to add one more phrase that will enable you to follow up without losing some of your psychological advantage.

Follow up — "I will follow up with a phone call in a few days. . . " An advantage to telephone follow up is that it will enable you to talk with many top executives in your target field and you will learn much about your target industry and its inner workings.

When the seller calls, you are going to want to sound very businesslike and professional. So make sure your kids don't answer your phone. Buy a cellular phone with a dedicated line that you will answer with your new business name. I know that some of you might be thinking that I am overdoing it a bit with this image thing. Trust me, I'm not.

The telephone can be a great liability to you in developing a cosmic bond with the seller. Throughout the entire process of working with the seller use telephone conversations only to set up face-to-face meetings. Do not use the telephone to develop any kind of intelligence or negotiating posture. Remember this is their baby, a business is to its owner. . . what a child is to a parent. Your objective with this first call is to set up an appointment for breakfast or lunch with the seller utilizing the fewest possible words on the phone.

I hope this helps in your search.

HornedToad
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Re: Where to find a business to purchase?

Post by HornedToad » Sat Jan 23, 2016 3:29 pm

I think LoopNet http://www.loopnet.com/ has businesses in addition to commercial real estate but could be wrong.

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thethinker
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Re: Where to find a business to purchase?

Post by thethinker » Mon Feb 01, 2016 5:05 pm

HornedToad wrote:I think LoopNet http://www.loopnet.com/ has businesses in addition to commercial real estate but could be wrong.


Thank you I will look into it.

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