SEARCH  Right Arrow

Business Owners: Do Not Make It Hard To Buy Your Small Business

After spending several days talking to dozens of people who claim to have an interest in a business for sale; after answering the same dumb question for the millionth time; after discovering that a great majority of these so-called buyers lack either the money (business purchase financing would be needed), the common sense, or enough business etiquette - maybe all three - to purchase the business in the first place, it is not surprising that many owner/sellers start to burn out on the selling process.

There is a danger, however, that "burn-out" and skepticism may cause a seller to insulate himself, or herself from this process to the extent that a real buyer can't make easy contact or even the ability to make a reasonable offer through an LOI or purchase agreement. Bottomline when selling a small business make it easy for potential buyers to contact you and be prepared for the selling process (in addition to a realistic asking/selling price upfront).

And that is a lost opportunity to make the sale.

Owner/sellers often are tempted to create "filters" to "weed out" unqualified, unmotivated, time-wasting buyer prospects.

And while it certainly is imperative that sellers carefully qualify all prospective buyers, there is a difference between "qualifying" and "turning off" buyers. The difference is, ultimately, the ability to sell the business.

A case in point concerns the seller of a Northern California fast food restaurant franchise for sale who had considerable difficulty getting any responses for a business offering - one that should have attracted several interested parties. A review of his advertising & marketing campaign on BizBen.com revealed many of the problems.

One was pricing (or should I say overpricing). Leaving some "room for negotiations" as many owner/sellers do, this owner set a asking price that was 15% to 20% higher than the bottom-line figure he was willing to receive. He reasoned that since many buyers will offer 10 to 20 percent below asking, the way to get his price, was with this over-price tactic. Additionally, he insisted on an all-cash transaction, and this may have eliminated a number of buyers who might otherwise have responded at the higher price if it was "packaged" with provable, reliable seller financing (or 3rd party financing - SBA, Non SBA, Bridge Financing, etc).

Noticing the lack of response, the seller upped the price by a significant amount. feeling he may have priced it too low to begin with (since other businesses in this franchise system, doing comparable volume, had recently sold for more than he asked).  Perhaps, he reasoned, the low price was "sending a signal" that there is something wrong with the business - that the business is on the business-sales equivalent of the "discount rack."

Still no action.

His other key problem was rooted in a clever idea to minimize his time wasted with "buyers" who are unable or unwilling to move beyond the inquiry stage. When calling the response phone number the seller had posted with his business for sale ad/posting on BizBen, prospective buyers got a message encouraging them to go to a website he created, where they could register with information about themselves, learn more about the franchise requirements, and then--after going through that process - receive some information about his business for sale.

Understandably, with about 600 fast food franchises currently to check out on the BizBen.com website, most anyone inquiring about this particular business and getting that response, immediately crossed off this potential business as too complicated to pursue, and went on to the next offering.

This was getting nowhere.

The owner/seller requested, from me, some advice about how to get responses to his "for sale" ad/posting. Among the suggestions offered were: 1) Price the business at the minimum amount to which you will agree - and stand firm on the price, and 2) When the phone rings, answer it rather than letting it forward to a recorded message that explains the procedure necessary to learn about the company. 3) Upgrade his standard posting to the Fast Track program or ProSell Program for increased exposure to the right buyers. 4) Get his business pre-approved for business purchase financing for interested buyers - making certain that his business is financeable and getting lenders ready for potential buyers who want to act quickly.

Within days after making these and a few more changes, and becoming more available for inquiries, this owner/seller not only began getting a great deal of response, he also received an acceptable offer that he accepted. And he is fortunate that he took a back-up offer, as the first buyer was unable to meet franchisor requirements (take back-up offers - always).

With escrow scheduled to close in a few days on the second deal, this seller is beginning to move into other enterprises, a bit more knowledgeable about the importance of pricing a business correctly, making it easy for buyer prospects to get a hold of you, and seeking a broad audience of business buyers for your offering.

Yes, many potential business buyers you talk to will waste your time. But you need to expose your business to as many potential business buyers as possible, and then be ready to respond appropriately and quickly to each inquiry either via phone, email or text. At some point you'll receive the inquiry that will ultimately lead to a satisfactory sale.

Bottomline - advertise/market your business for sale correctly, expose your business to the right types of buyers, price your small business correctly at the beginning of the selling process (remember the first 30 to 45 days is the most critical), and for gosh sakes make it easy for buyers to reach you (offer your cell phone and text as contact numbers), and make sure you take back-up offers from buyers until you close your deal and get paid from the escrow process!

About the Author: Peter Siegel, MBA is the Founder & Lead Advisor at BizBen.com (established 1994 - 8,000+ California small businesses for sale & wanted to buy postings -  with 500 new & refreshed posts daily). BizBen.com offers business buyers, owner sellers, business brokers and advisors free access to online postings, articles, blog posts, discussions, podcast, resource and broker directories, etc. Peter heads up the BizBen.com ProBuy, ProSell, & ProIntermediary Programs. Peter Siegel, MBA can be reached direct at 925-785-3118.

Contributor:

Peter Siegel MBA, BizBen Founder, ProBuy, ProSell, ProIntermediary Programs
Name: Peter Siegel, MBA
Company: BizBen.com
Area(s) Served: All Of California
Peter Siegel, MBA - Founder Of BizBen.com (since 1994), I am the Lead Advisor for the ProSell, ProBuy, & ProIntermediary Programs. I advise/coach buyers, sellers, and brokers daily about buying & selling small to mid-sized businesses throughout the Nation. I can be reached direct at 925-785-3118.
Details  | 
 

Back To Articles & Blogs


Helpful Resources To Assist In Selling And Buying California Businesses
Jerome Thissen, Broker, National Franchise Sales

BROKERAGE - Specializing in the Resale of Franchise Businesses Since 1978 ASSET RECOVERY - Asset Recovery through Bankruptcy, Receivership & Foreclosure ADVISORY SERVICES - Buy-Side Representation, Valuations, Dispute Consulting, Restructuring Advisory, and Brand Development Advisory ...

Stewart Guthrie - Business Broker: Sacramento Area

Stewart Guthrie, Northern California business broker, brings 25 years of experience in business ownership and technical sales in a variety of industries. For 15 of the last 20 years or so, Stewart has owned, operated and sold businesses in real estate and distribution. Business brokerage services.

Alex Beringer, Business Broker Specialist: FedEx Routes In California

Business brokerage services specializing in FedEx Routes throughout California.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services In California

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.

Larry Treystman, Business Broker Specialist - Home Health, Hospice

Founder of one of the top consulting firms in the nation specializing in Home Health and Hospice. Helping guide healthcare entrepreneurs through regulations, changes and management. For Change of Ownership applications or anything else related to Home Health please call or email.

Shalonda Chappel: 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.

Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Frank Passantino: Pool Routes Brokerage - California

Business brokerage services for over 40 years specializing in pool routes and related businesses throughout California.


Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Selling My Small Business: What Items Should I Have Ready To Be Successful?

When selling a small to mid-sized business, owners should have their paperwork and financial information ready to go! They should also have a short business plan of past history, current operations, and potential for the future. In this BizBen Discussion several advisors and intermediaries weigh in.

Coronavirus: Advisors Discuss The Topic - Buying & Selling Small Businesses

During this time period of being "sheltered in place" we discuss strategies, best practices that business buyers, business brokers, agents, and owner/sellers are practicing or thinking about during these times of being immobilized. Also discussed are business types that may be good purchases.

Should I Buy A Business That is Losing Money? Feedback From Top Advisors

Are businesses worth taking a look at when they are losing money? Multiple Advisors & Business Brokers weigh in on this topic and say yes! (but be careful) on a BizBen Discussion. Some great feedback on this topic will make potential business buyers (and money losing sellers) want to read this info!

Pricing A Small Business For Sale - Several Factors Play A Valuation Role!

As an Advisor On BizBen I talk to many California business owners, business buyers, brokers, and agents on a daily basis about valuing California small to mid-sized businesses. Many key factors go into this analysis including market demand, history of earnings, and even how the deal is structured.

Unreported Income Cash Claims By The Seller-What Should A Business Buyer Do?

One of the most difficult challenges when purchasing a California small business is expressed by a prospective buyer of a liquor store who is told by the owner/seller that there is more money being made than shows up on the books. Should this buyer accept that statement and go ahead with the deal?

BizBen ProBuy Program - Professional Assistance With Buying A Small Business

Buying a California business can be a confusing and/or frustrating process for many business buyers. Statistics show that over 80% of all buyers never end up buying a business. The BizBen ProBuy Program assists potential buyers of California businesses with the process of buying a small business.

How Many Months Should I List My Business With A Business Broker?

It's important to remember that selling a business takes time. Unlike selling a house, which can be sold relatively fast, a business can take up to six months to a year to sell. Joe Ranieri (Orange County Business Broker) at 714-292-5448 explores this topic from a Business Brokers perspective.

Buyer Beware: Does A Company's Culture Effect The Sale Of A Small Business?

When purchasing a small to mid-sized CA business, there are a many items to evaluate. One area that is often overlooked is the business's office culture. Peter Siegel, MBA with BizBen discusses with business buyers the importance of understanding how the business "feels" on a day-to-day basis.

SEARCH  Right Arrow


     

For Sale Postings · Wanted Postings · Blog · Events
Brokers · Resources · Advertising Info · Login
888-212-4747 · Full Version
Terms Of Use · Advertising Policy · Privacy Policy ·