What is a Buyer Search?

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Websites like BizBuySell have made it easier than ever to look for businesses to buy, but they don’t necessarily make the buying process itself any easier. In fact, it can frustrate some buyers.

In fact, it’s often after getting the run-around with some listings on public websites that serious buyers come to us looking for help. We can help put together opportunities that match a buyer’s specific needs and wants.

Factors to Consider

The most popular factors for buyers include:

• Geography — how far away is the buyer willing to travel for an opportunity? Is the business a remote one?
• Industry — which industries interest the buyer and which ones are ones he/she want nothing to do with?
• Cash flow — how much money does the business “need” to make for the given financial situation of the buyer?
• Investment level — how much money does the buyer have to spend? Will he/she need an SBA loan?

Mindset During the Process

Part of what brings a client to us for our buyer search service is frustration. The client may have already had a couple possible deals fall through for any number of reasons. We have to communicate at the outset that that may happen again.

There is no “drive thru” service for acquiring a business. As much as we would like to offer that, it’s just not how things work. When asked about how long the process might take, Debbie Small shared that she thought most of her buyer searches averaged around 150 hours on her end, and that her buyers know she suggests it’s probably going to be the same amount of time on their end as well.

As we always say, it’s a marathon, so have the mindset that patience and diligence wins here, even though you may run into frustrating situations. Buyers have to be committed to the process once they get started.

Work During the Process

We referred to 150 hours of work during this process. What can this include?

• Brokers like Debbie will initially send a large list of possible businesses to buyers based on the factors we mentioned above (and others that the buyer might be particular about, say, nothing involving food service or alcohol). Buyers will need to spend time eliminating businesses from that initial list.
• Buyers will reach out to sellers and have conversations with them and may do on-site tours and meetings.
• Buyers will need to get their financing lined up. Most often this will be in the form of an SBA loan.

The buyer will also need to do the regular due diligence and legal consultation that’s part of any business transaction.

In the Background

Apart from the mindset and the work a buyer will need to put in, we have to know that their personal life is in order and oriented towards this goal. We’ve shared in a previous article that a spouse threatened a divorce if a business was purchased. This is an example of a complete absence of integrating one’s personal life into this process. If your family isn’t on board with this, they either have to get on board or you have to abandon the process. Sometimes, the family has fears and problems we can help overcome, and sometimes we can’t. Either way, we can’t help what we don’t know about, so let us know about any challenges that might not be immediately obvious.

Tired of running into unserious listings on business sale websites? We have access to many businesses that are never going to show up there but might be perfect fits for you. Contact us today.